Indian Markets Face Gap-Down Opening Amid Global Concerns
Indian equity markets are poised for a negative start on Thursday, with GIFT Nifty futures on the NSE International Exchange trading 203.20 points (0.86 per cent) lower at 23,312.50. This signals a cautious mood driven by a confluence of global and domestic factors.
Global Headwinds and Geopolitical Tensions
The downturn follows a pullback on Wall Street, where stocks retreated from record highs on Wednesday. Renewed tensions in the Middle East, particularly involving Iran, have fueled inflation jitters and pushed crude oil prices higher. Brent crude futures were down 0.7 per cent at $97.12 a barrel on Thursday, even after a ceasefire agreement between Lebanon and Israel. Asian markets also opened lower, with KOSPI and Nikkei dropping two per cent, and Hang Seng down one per cent.
Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, noted that investor sentiment remains cautious due to the lack of progress in US-Iran negotiations, which continues to impact global energy supplies, inflationary pressures, and macroeconomic stability. Investors are also awaiting the Reserve Bank of India's (RBI) monetary policy announcement, adding to the prevailing uncertainty.
Key Market Movers: FII Outflows and Commodity Prices
Foreign Portfolio Investors (FPIs) were net sellers of domestic stocks, offloading Rs 5,616.56 crore on Wednesday. Conversely, Domestic Institutional Investors (DIIs) provided support, buying Indian equities worth Rs 5,740.89 crore. Beyond equities, the US dollar index held steady at 99.45, while gold rose 0.5 per cent to $4,455.71. Bitcoin experienced a 1.3 per cent decline, trading at $64,047.39.
Ajit Mishra, SVP of Research at Religare Broking, attributed the market weakness primarily to renewed geopolitical tensions in the Middle East, which have driven Brent crude prices higher. He recommended a cautious, stock-specific approach with strict risk management.
Nifty50 and Sensex Outlook: Key Levels to Watch
Analysts suggest that the market has formed a promising reversal pattern on intraday charts, with a dragonfly doji candlestick formation on daily charts indicating indecisiveness. Shrikant Chouhan, Head of Equity Research at Kotak Securities, identified 23,250/74,000 as a crucial support zone. As long as the market stays above this, a pullback towards 23,500/74,600 and potentially 23,600/75,000 is possible.
However, a decisive break below 23,250/74,000 could see the market retest 23,150/73,700, with further downside towards 23,050/73,500. Hitesh Tailor, Technical Research Analyst at Choice Equity Broking, noted that Sensex continues to face resistance near the 74,800–75,000 zone, where selling pressure has emerged. A sustained move above this resistance could improve short-term sentiment.
Rupak De, Senior Technical Analyst at LKP Securities, highlighted a lower-top, lower-bottom formation on the hourly timeframe for Nifty, indicating a bearish trend. While a positive divergence on the hourly RSI suggests some momentum improvement, the short-term trend remains weak. A fall below 23,300 could push Nifty towards 23,000, with 23,600 acting as a crucial resistance level on the upside.
Nifty Bank Outlook
Nifty Bank traded within a falling parallel channel during the first half of the session and formed a bullish candle on daily charts, reflecting buying interest at lower levels. Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, stated that follow-through buying is crucial for the ongoing pullback to sustain.
Immediate resistance for Bank Nifty is in the 54,600-54,700 zone. A sustainable move above this could extend the pullback towards 55,100, followed by 55,500. Immediate support for Nifty Bank is placed in the 53,800-53,700 zone. Bajaj Broking added that the index is likely to consolidate between 52,500-55,000, with a breakout or breakdown signalling a directional move. Key support is at 52,700-52,500, while resistance is at 54,600-55,000.