Indian equity benchmarks are set for a cautious, likely lower, start on Tuesday. This sentiment follows a decline in GIFT Nifty Futures on the NSE International Exchange, which were down 85.20 points, or 0.35 percent, trading at 24,307.50.
Investors are anticipated to adopt a defensive posture amidst several influencing factors, including renewed strength in crude oil prices, persistent geopolitical uncertainties, and mixed global cues. The market's focus is shifting from the recently concluded Q1FY27 earnings season to broader global macroeconomic and geopolitical developments.
Global Market Performance and Key Influencers
Wall Street indices closed lower on Monday as investors awaited quarterly reports from major retailers for insights into US consumer spending. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all registered declines. Asian markets also struggled at their open on Tuesday, with Nikkei and Hang Seng down approximately one percent each, though KOSPI saw a gain.
Crude oil prices rose over $2 on Monday, driven by the ongoing stalemate in Iran, which refocused traders on global supply concerns. Brent crude futures edged up to $91.06 a barrel. The US dollar index traded around a two-month low of 99.527, while gold extended recent gains, up 0.1 percent at $4,420.07. Bitcoin also saw a slight increase.
Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, noted that investors would closely monitor the US Federal Reserve's July meeting minutes this week for indications on the global interest-rate outlook.
Investor Sentiment and Flows
Investor sentiment remains subdued due to the continued uncertainty surrounding the US-Iran conflict and potential disruptions to global energy supplies, according to Ajit Mishra, SVP of Research at Religare Broking. He advised a cautious, stock-specific approach, recommending the use of market declines to accumulate stronger stocks with disciplined risk management.
Provisional data from the NSE showed that Foreign Portfolio Investors (FPIs) were net sellers of domestic stocks, offloading Rs 2,535.10 crore on Monday. Conversely, Domestic Institutional Investors (DIIs) were net buyers of Indian equities, purchasing Rs 5,101.46 crore.
Nifty50, Sensex, and India VIX Outlook
The market formed a bearish candle on daily charts, with Nifty closing below its 20-day Simple Moving Average (SMA) for the first time in a while, which is largely negative, stated Shrikant Chouhan, Head of Equity Research at Kotak Securities.
- For day traders, 24,400/78,000 will act as immediate resistance for bulls. A sustained move above this could lead to a bounce back to 24,500-24,620/80,200-80,500.
- Conversely, a break below 24,220/77,500 could accelerate selling pressure, potentially retesting 24,100-24,050/77,200-77,000.
Sensex is consolidating within the 77,000–78,300 range. Sachin Gupta, VP of Technical Research at Choice Equity Broking, highlighted that holding the 77,000–77,400 support zone is crucial for stability, while a sustained move above 78,000–78,300 could revive upward momentum. He expects it to remain range-bound with buying interest at lower levels.
Hitesh Rathi, Technical Analyst – Equity & Derivatives at Angel One, suggested that while some buying interest might emerge, a meaningful reversal of the downtrend would only be confirmed upon reclaiming the 24,450–24,500 band. The broader near-term setup remains cautious, with 24,250-24,200 acting as an immediate support cluster, followed by stronger support at 24,100-24,000.
Om Mehra, Technical Research Analyst at SAMCO Securities, noted that the Relative Strength Index (RSI) is at the 50 mark, indicating a neutral stance. The Moving Average Convergence Divergence (MACD) histogram has turned negative, with the fast line slipping below the signal line, highlighting near-term weakness. India VIX settled at 11.32.
Nifty Bank Outlook
Nifty Bank continues to trade above its 50-day, 100-day, and 200-day Exponential Moving Averages (EMAs), reflecting a positive broader trend. However, momentum indicators suggest a range-bound market environment. Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, pointed out that the daily RSI has oscillated within a narrow band for the past 28 trading sessions, indicating an absence of strong directional bias.
- The 57,900-58,000 zone is expected to be a crucial resistance area.
- On the downside, the 57,100-57,000 zone remains an important support region.
- A decisive breakout or breakdown beyond these levels will likely determine the next trending move for Nifty Bank.
Bajaj Broking added that Nifty Bank formed a high wave candle, with buying emerging from a rising trendline and the 50-day EMA. The broader consolidation range remains intact between 56,500 and 58,700. It faces resistance around 58,000; a move above this could open upside towards 58,500-58,700. Failure to breach 58,000 would lead to consolidation in the 57,000-58,000 range. A decisive break below 57,000 would signal an extended corrective move towards 56,500.