Indian equity markets are set for a weak start on Friday, as indicated by GIFT Nifty futures trading down 202.60 points, or 0.85 per cent, at 23,671 on the NSE International Exchange. This downturn follows a broad risk-off mood across global financial markets, driven by escalating geopolitical tensions in West Asia and a sharp surge in crude oil prices.
Global Headwinds Drive Investor Caution
US stocks closed lower on Thursday, impacted by concerns over heavy AI spending, rising oil prices amplifying inflation worries, and increased bond yields. The Dow Jones Industrial Average dropped 0.97 per cent, the S&P 500 lost 1.21 per cent, and the Nasdaq Composite cracked 2.15 per cent.
Asian markets mirrored this negative sentiment on Friday, with oil prices soaring back above $100 a barrel. Brent crude held at $100.85 a barrel after a 7 per cent overnight surge, reaching a two-month high of $102 following attacks by Iran-aligned Houthis on Saudi tankers in the Red Sea. This renewed spike in energy costs has heightened inflation concerns, pushing US Treasury yields higher and reinforcing a cautious investor mood globally.
Domestic Market Outlook and Key Levels
Analysts expect Indian equities to remain under pressure in the near term. Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, noted that elevated crude oil prices, persistent geopolitical tensions, a weakening rupee, and sustained FII selling are likely to keep investor sentiment cautious.
Provisional data from NSE showed Foreign Portfolio Investors (FPIs) were net sellers of domestic stocks worth Rs 2,999.23 crore on Thursday, while Domestic Institutional Investors (DIIs) bought Rs 2,947.14 crore.
Nifty50 and Sensex: Technical Levels to Watch
Shrikant Chouhan, Head of Equity Research at Kotak Securities, indicated that a long bearish candle suggests further weakness. He stated, "As long as the market is trading below 24,100/77,000, weak sentiment is likely to continue." The correction wave could persist towards the 50-day SMA or 23,850/76,000, potentially dragging the index to 23,750-23,700/75,700-75,500. Conversely, a decisive move above 24,100/77,000 could lead to a bounce back towards 24,200-24,250/77,300-77,500.
For Sensex, Sachin Gupta, VP of Technical Research at Choice Equity Broking, identified immediate support near the 75,600–75,700 zone, with resistance around 76,900–77,000. Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, noted Nifty is heading towards crucial supports of 23,700-23,650, where a sizable bounce-back is possible. Immediate resistance is at 24,000 levels.
Nifty Bank: Pressure Continues
Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, highlighted that momentum indicators for Bank Nifty reflect weakness, with the daily RSI at 44.20 and trending lower. The 56,100-56,000 zone is expected to serve as a critical support. A break below 56,000 could intensify selling pressure towards 55,400, while 56,900-57,000 acts as significant resistance.
Bajaj Broking Research added that a follow-through weakness below the 56,200-56,500 support area could accelerate decline towards 55,500-55,000 levels. On the upside, 57,500 is an immediate hurdle, with 58,500-58,700 acting as stiff resistance.
Ajit Mishra, SVP of Research at Religare Broking, advised, "Given the mixed earnings outlook, elevated geopolitical risks, and persistent volatility, we continue to advocate a stock-specific approach while maintaining disciplined risk and position management."
India VIX, a measure of market volatility, edged higher to 13.48, signaling that traders are factoring in elevated near-term volatility.