Indian equity benchmark indices are expected to open lower on Wednesday, following three consecutive sessions of gains. Gift Nifty futures on the NSE International Exchange were down 156.50 points, or 0.64 per cent, at 24,428, indicating a negative start for the domestic market.
Global Cues and Geopolitical Tensions
The anticipated downturn comes amidst renewed concerns over the Middle East conflict, which overshadowed positive corporate earnings reports in the US. US stocks closed lower on Tuesday, with the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all experiencing declines. Investors are closely monitoring the outlook for US-Iran peace talks and a proposed ceasefire extension, though participation from Iran or Israel remains uncertain.
Asian markets presented a mixed picture in early trade, with Japan's Nikkei rising, while South Korea's KOSPI and Hong Kong's Hang Seng saw declines. Crude oil prices have also seen a significant increase since late February, adding to geopolitical uncertainties. The US dollar strengthened against major currencies, pushing to a one-week high as demand for safe-haven assets increased.
Domestic Market Analysis and Expert Outlook
Despite the global headwinds, some analysts suggest Indian equities might continue a gradual upward movement, albeit cautiously. Provisional data from the NSE revealed that Foreign Portfolio Investors (FPIs) were net sellers of domestic stocks on Tuesday, offloading Rs 1,918.99 crore. Conversely, Domestic Institutional Investors (DIIs) showed confidence, becoming net buyers of Indian equities to the tune of Rs 2,221.27 crore.
Nifty50 and Sensex Outlook
Technically, the market has formed a bullish candle on daily charts, maintaining an uptrend continuation formation intraday. However, temporary overbought conditions could trigger some profit booking at higher levels. Shrikant Chouhan, Head Equity Research at Kotak Securities, identifies 24,500/79,000 as immediate support zones for day traders. A move above these levels could see the market advance towards 25,750–25,800 / 79,800–80,000, while a drop below could lead to a quick correction, retesting 24,350–24,300 / 78,700–78,500.
Osho Krishan, Chief Manager - Technical & Derivative Research at Angle One, notes Nifty50 is positioned between its 50 and 100-day Exponential Moving Averages (DEMA). The 100 DEMA near 24,750 is expected to act as immediate resistance. A decisive breakout above this level could revive bullish momentum towards the 25,000 mark. Krishan advises a 'buy-on-dips' strategy, encouraging traders to focus on thematic sectors while remaining vigilant to global developments.
Nifty Bank Outlook
The Nifty Bank index outperformed frontline indices, closing above its 100-day and 200-day EMAs, a positive technical signal. Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, expects the index to extend its upward momentum, potentially retesting 58,000 and 58,500 in the short term. The 56,800–56,700 zone is likely to provide immediate support.
Ponmudi R, CEO at Enrich Money, points to immediate resistance in the 57,500–57,800 zone, with failure to break it potentially leading to mild profit booking. Support is seen at 57,200–57,000, with stronger support near 56,800–56,500. Momentum indicators remain supportive, and the near-term outlook is cautiously positive as long as the index holds above key support levels, with 57,800 being crucial for further upside.
Ajit Mishra, SVP of Research at Religare Broking, advises traders to "maintain a positive yet cautious stance, focusing on stock-specific opportunities while keeping position sizes in check, given the lingering geopolitical risks."