Indian equity markets are anticipated to open on a positive note today, fueled by a 0.21 percent rise in GIFT Nifty Futures to 23,561.50. This comes as investors keenly await the Reserve Bank of India's (RBI) upcoming policy decision, which is expected to provide crucial insights into interest rates, inflation management, and currency stability amid elevated energy prices.
Market Overview and Global Factors
The domestic market's positive inclination is tempered by mixed global signals. Asian share markets saw declines on Friday, with KOSPI dropping over 3 percent and Nikkei falling more than 1 percent, as investors took profits from technology stocks. Conversely, Wall Street advanced on Thursday, buoyed by progress towards an end to the Iran war, though a chip sector sell-off led by Broadcom pulled the Nasdaq lower.
Crude oil prices remain a significant factor, with Brent crude futures steady at $95 a barrel, on track for a weekly gain exceeding 3 percent. US crude dipped slightly to $92.73 per barrel but is set for a robust 6 percent weekly rise. Higher oil prices pose an inflation risk and increase India's import bill. The US dollar has strengthened, on track for a 0.5 percent weekly rise, while spot gold saw a slight dip.
Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, noted, "Indian equities are likely to remain range-bound in the near term amid a mix of domestic and global developments. Investors will closely monitor the outcome of the RBI’s Policy, which is expected to provide important cues on the interest rate, inflation outlook, economic growth and currency stability."
FII-DII Investment Flows
Provisional data indicates that Foreign Portfolio Investors (FPIs) were net sellers of domestic stocks, offloading Rs 4,447.06 crore on Tuesday. In contrast, Domestic Institutional Investors (DIIs) showed confidence, becoming net buyers of Indian equities to the tune of Rs 3,986.44 crore.
Nifty50 & Sensex Technical Outlook
Technical analysis suggests a non-directional intraday market, with traders awaiting a clear breakout. Shrikant Chouhan, Head of Equity Research at Kotak Securities, identified 23,500/74,700 as immediate breakout zones for bulls. "Above these levels, the market could rally to 23,600 and the 50-day SMA, or 23,680. For the Sensex, key levels would be 75,000 and 75,300." On the downside, 23,300-23,250/74,000-73,800 are crucial support zones.
Hitesh Tailor, Technical Research Analyst at Choice Equity Broking, highlighted Sensex's buying interest near the 73,500–73,800 support zone. "On the upside, the 75,000–75,200 zone continues to act as an immediate resistance area, where stronger momentum will be required for a meaningful breakout."
Rupak De, Senior Technical Analyst at LKP Securities, noted a bearish crossover in the RSI, suggesting negative momentum. "Sentiment is likely to stay uncertain with a bearish bias in the short term, as long as the index remains below 23,500. On the other hand, a decisive move above 23,500 could trigger a rally towards 23,700. On the downside, immediate support is placed at 23,370; a decisive breach below this level may drag the Nifty towards 23,200 and lower levels."
Nifty Bank Analysis
The Nifty Bank index has shown outperformance, establishing a base near its prior swing low despite trading below key moving averages. The daily RSI indicates sideways momentum. Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, pointed to 54,700-54,800 as immediate resistance. "A decisive move above the 54,800 mark could trigger an extension of the pullback rally, potentially pushing the index towards 55,400. On the downside, the zone of 53,900-53,800 is expected to provide strong support."
Bajaj Broking observed a third consecutive bullish candle for Nifty Bank, suggesting a continuation of the pullback from a key support area. They anticipate consolidation within the 52,500-55,500 range, with a breakout or breakdown signaling directional movement. Key support is placed at 52,700-52,500, while resistance is at 55,000-55,500.