Indian equity markets are poised for a cautious start on Friday, despite a positive signal from GIFT Nifty Futures, which were up 38 points, or 0.16 per cent, at 24,331 on the NSE International Exchange. This comes after a volatile global session marked by rising US Treasury yields and disappointing corporate earnings, notably from Walmart, which dampened investor sentiment.
Global Headwinds Persist
The primary US indices closed lower on Thursday as an uptick in Treasury yields curbed risk appetite. This reversal followed a brief period of relief earlier in the week, fueled by US Treasury announcements regarding increased buybacks of long-duration debt. However, global bond market stress continues, contributing to a general risk aversion.
Most Asian share indices were heading for weekly declines on Friday. Japan's Nikkei tumbled nearly a per cent, while Hong Kong's Hang Seng and South Korea's KOSPI recorded marginal gains. Crude oil prices also remain elevated, with Brent futures trading around $93.12 a barrel, up over 5 per cent for the week, adding to inflationary concerns.
Domestic Market Outlook
Analysts anticipate Indian equities to trade sideways with a potential for marginal recovery, driven by value buying after seven consecutive sessions of decline. Broader market action and sector-specific opportunities are expected to be in focus, according to Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services.
Ajit Mishra, SVP of Research at Religare Broking, advised a cautious stance on the index, recommending a focus on selective stock-specific opportunities given the improved, but still fragile, global bond market stability.
Key Levels for Nifty50, Sensex, and Nifty Bank
Nifty50
- Immediate Support: 24,150
- Stronger Cushion: 24,040–24,000
- Immediate Resistance: 24,250–24,350
- Stronger Hurdle: 24,400–24,450
Hitesh Rathi, Technical Analyst at Angel One, noted that the market might remain tentative, with signs of profit booking emerging in some stocks after a recent strong uptrend. He advised participants to maintain a cautious and highly selective approach.
Sensex
The Sensex formed a bullish green candle after three consecutive red ones, signaling a recovery in sentiment. It closed above its 50-Day EMA, improving its short-term structure. Sachin Gupta, VP of Technical Research at Choice Equity Broking, highlighted:
- Crucial Support Zone: 77,000–77,365 (Sustaining above this is vital for recovery)
- Nearest Important Resistance: 100-Day EMA
- Decisive Breakout Level: Above 77,720–78,000 (Could open further upside)
Momentum indicators show improvement, with the RSI recovering, though still in early stages of reversal. India VIX declined sharply to 10.76, supporting improved risk sentiment.
Nifty Bank
The Nifty Bank has been consolidating within a narrow range, indicating a lack of clear directional momentum. Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, identified:
- Key Resistance Zone: 57,800–57,900
- Important Support Area: 57,100–57,000
A decisive breakout or breakdown from these levels could trigger a significant trending move. Bajaj Broking Research noted that within consolidation, the index faces resistance around 57,500-57,800, with a move below potentially opening downside towards 56,500-56,200.
Provisional data indicates that Foreign Portfolio Investors (FPIs) were net sellers of domestic stocks, offloading Rs 583.36 crore on Thursday. Conversely, Domestic Institutional Investors (DIIs) were net buyers, injecting Rs 3,537.71 crore into Indian equities.