Indian benchmark equity indices are expected to open on a cautious note Wednesday, influenced by a negative trend in GIFT Nifty futures and ongoing global uncertainties. GIFT Nifty futures on the NSE International Exchange were down 134.60 points, or 0.57 percent, at 23,468.50, signaling a subdued start for domestic trading.
Global Cues and Investor Sentiment
Global markets presented a mixed picture. US stocks closed modestly higher on Tuesday, with AI-driven optimism somewhat offset by tensions surrounding US-Iran talks. In Asian trading Wednesday, Japan's Nikkei saw nearly a 3 percent rise, while Hong Kong's Hang Seng tumbled, and South Korea's KOSPI remained closed.
Geopolitical uncertainty, particularly in West Asia, continues to weigh on investor sentiment, keeping a risk-off mode prevalent. The stalled US-Iran peace talks have also contributed to rising oil prices, with US crude futures jumping around 2 percent to $95.40 a barrel. The dollar's persistent strength pushed the Japanese yen to the 160 level.
Domestically, traders are now keenly awaiting the Reserve Bank of India's (RBI) monetary policy announcement later this week. Experts suggest that the Indian market may trade within a broader range in the near term due to global macro uncertainties and sustained outflows from Foreign Institutional Investors (FIIs).
FII and DII Activity
Provisional data from NSE indicates that FIIs were net sellers of Indian stocks on Tuesday, offloading Rs 8,362.92 crore. Conversely, Domestic Institutional Investors (DIIs) emerged as net buyers, injecting Rs 9,589.32 crore into Indian equities.
Technical Outlook: Nifty50, Sensex, and Nifty Bank
Technical analysis suggests a potential for continued uptrend if key support levels hold. For Nifty50, immediate support is identified at 23,300 and 23,220. As long as the market trades above these levels, a pullback is likely to continue, potentially bouncing towards the 50-day SMA (23,700) and 20-day SMA (23,770). However, a breach below 23,220 could signal a negative shift, prompting traders to exit long positions. The Relative Strength Index (RSI) remains in a bearish crossover, reinforcing a negative bias, with immediate resistance at 23,600.
The Sensex formed a strong recovery candle, finding support near the 73,800–74,000 zone. This indicates buying interest at lower levels. On the upside, 75,000–75,300 are key resistance levels, while 73,800–74,000 acts as a crucial support area. India VIX, the volatility index, declined by 7 percent to around 15, which could provide further support to bullish sentiment if moderation continues.
Nifty Bank also staged a rebound after a gap-down opening but continues to trade below its key moving averages, suggesting caution. The 54,200–54,300 zone is an immediate hurdle. A sustained move above this could provide upward momentum. On the downside, 53,500–53,400 is a crucial support area; a breach below 53,400 could intensify selling pressure, pushing the index towards 52,800. The Nifty Bank is expected to consolidate within the 52,500-54,600 range, with a breakout or breakdown signaling a directional move.