Indian equity markets are anticipated to open higher on Wednesday, buoyed by positive global cues and a notable decline in crude oil prices. Early indicators from GIFT Nifty Futures on the NSE International Exchange showed an 87.80-point (0.36 percent) increase, trading at 24,559.50, suggesting an optimistic start for domestic indices.
Investor sentiment is receiving a boost from hopes of de-escalating US-Iran tensions, which have contributed to falling oil prices. Developments surrounding Iran and the strategic Strait of Hormuz remain crucial for crude prices, the Indian Rupee, and foreign investment flows.
Global Market Performance
Wall Street
On Tuesday, Wall Street's major indexes closed higher, finding relief in lower oil prices and bond yields. The Dow Jones Industrial Average rose 160.24 points (0.30 percent) to 53,577.40. The S&P 500 gained 24.38 points (0.32 percent) to 7,677.24, and the Nasdaq Composite jumped 171.11 points (0.66 percent) to 26,151.30.
Asian Markets
Asian stocks also saw gains on Wednesday, tracking the positive momentum from falling oil prices and the potential reopening of the Strait of Hormuz. South Korea's KOSPI and Hong Kong's Hang Seng index each rose by one percent, while Japan's Nikkei added half a percent.
Commodity and Currency Watch
- Crude Oil: Brent crude futures continued their downward trend for a third consecutive day on Wednesday, sliding over 2 percent to $86.41 per barrel. This decline is attributed to expectations of increased supply flowing through the Strait of Hormuz.
- US Dollar: The dollar index stood at 98.93.
- Gold: Spot gold was last trading at $4,646.08 per ounce, nearing its three-month high.
- Bitcoin: Bitcoin saw a modest gain of 0.6 percent, reaching $78,704.
Investor Sentiment and Flows
Despite the positive open, investor sentiment remains somewhat fragile due to ongoing geopolitical tensions. Reports of potential new US economic measures against Iran are still weighing on market confidence, according to Ajit Mishra, SVP of Research at Religare Broking. Experts advise a stock-specific approach and disciplined risk management in the current volatile environment.
Provisional data from NSE revealed that Foreign Portfolio Investors (FPIs) were net sellers of domestic stocks on Tuesday, offloading shares worth Rs 1,181.66 crore. Conversely, Domestic Institutional Investors (DIIs) showed strong buying interest, acquiring Indian equities worth Rs 2,493.41 crore on a net basis.
Technical Outlook for Key Indices
Nifty50
The Nifty50 has moved back above its 20-day Exponential Moving Average (EMA), signaling improved momentum. The Relative Strength Index (RSI) has also entered a bullish crossover, suggesting a strengthening trend. Analysts expect the uptrend to continue, with immediate resistance levels identified at 24,400 and 24,480. On the downside, immediate support is placed at 24,240, according to Rupak De, Senior Technical Analyst at LKP Securities.
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, noted the formation of a 'Bullish Engulfing' pattern on the daily chart, indicating strong buying. The next upside targets are seen around 24,500-24,600, with immediate support at 24,100.
Sensex
The Sensex witnessed a significant recovery driven by strong buying, forming a bullish green daily candle. This indicates increased demand from lower levels. Sachin Gupta, VP of Technical Research at Choice Equity Broking, highlights the importance of sustaining above the 77,000–77,125 support zone. A sustained move beyond 77,800–78,000 could further strengthen the recovery.
India VIX
The India VIX, a measure of market volatility, remains subdued at 11.75. This low volatility suggests expectations of a measured, range-bound movement until a decisive breakout occurs, as per Dhupesh Dhameja, Derivatives Research Analyst at SAMCO Securities.
Nifty Bank
The Nifty Bank index formed a neutral candle, reflecting indecision at current levels. A clear breakout in either direction will be critical for its next move. Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, points to 57,100–57,000 as immediate support and 57,900–58,000 as an immediate hurdle. A sustained push above 58,000 could trigger a rally towards 58,400.
Bajaj Broking noted that the Nifty Bank is consolidating within an 8-week range of 56,500 and 58,700, facing resistance around 58,000. Sustaining below this level could lead to a downside towards 57,000 and 56,500. Conversely, a move above 58,000 could open up targets of 58,500-58,700 in the coming weeks.