Indian equity benchmark indices are expected to open with mild gains on Friday, despite mixed global cues. GIFT Nifty Futures on the NSE International Exchange were up 32.10 points, or 0.14 per cent, at 23,668, suggesting a cautious start for the domestic market.
Global and Macroeconomic Factors
Globally, the US dollar strengthened on Friday, set for its largest weekly gain in over two months, reaching a two-week high against a basket of currencies. US stocks recorded gains in overnight trade, with the Dow Jones Industrial Average retaking 50,000, and the S&P 500 and Nasdaq Composite hitting fresh all-time highs.
However, Asian markets presented a mixed picture, with KOSPI tanking over 3 per cent, and Hang Seng and Nikkei also seeing declines. Gold prices fell to a more than one-week low, influenced by higher energy prices and inflation fears. Brent crude oil futures rose to $106.32 a barrel, while US West Texas Intermediate futures were up at $101.71. Domestically, the Indian rupee continues to weaken against the backdrop of high crude oil prices.
Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, noted a cautious near-term outlook despite a strong rebound in Indian markets over the past two sessions. He highlighted persistent foreign outflows, elevated crude oil prices, and the rupee's depreciation to record lows as key macroeconomic risks for the domestic market.
Expert Outlook and Key Levels
According to Ajit Mishra, SVP of Research at Religare Broking, the improved sentiment was supported by favorable global cues, but the overall structure still suggests a 'sell-on-rise' bias unless the index decisively surpasses its resistance band. He recommends a stock-specific approach while cautioning against leveraged positions.
Nifty50 and Sensex Analysis
Shrikant Chouhan, Head of Equity Research at Kotak Securities, observed that the market found support near 23,400/74,500 after a gap-up open, forming a promising reversal pattern on intraday charts and a bullish candle on daily charts. For day traders, 23,500/74,800 and 23,600/75,100 are crucial support zones. Above these levels, the index could move towards the 50-day SMA or 23,850/76,200, potentially extending to 23,950–24,000/76,500-76,700. Below 23,500/74,800, the uptrend becomes vulnerable, prompting traders to exit long positions.
Rupak De, Senior Technical Analyst at LKP Securities, noted that Nifty continues to trade below the critical 20 EMA, indicating a bearish broader trend. A decisive move above 23,800 could trigger fresh upside momentum towards 24,200, but failure to sustain this level may invite renewed selling pressure.
Aakash Shah, Research Analyst at Choice Equity Broking, pinpointed immediate support for Sensex near 74,600–74,800, with stronger support around 74,500. Resistance is seen near 76,000–76,200, a breakout above which could open the path towards 76,500.
Nifty Bank Outlook
Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, stated that Nifty Bank trades below its key moving averages, with momentum indicators suggesting a sideways trend. The 54,700–54,800 zone is an immediate hurdle, with a sustained move above it potentially extending the rally to 55,300. Crucial support lies in the 53,500–53,600 zone.
Bajaj Broking highlighted that Nifty Bank formed a bullish candlestick pattern, indicating a strong pullback from oversold territory. A move above current levels could extend the pullback towards 55,000, while failure to do so might extend the correction towards 53,000-53,500. From a short-term perspective, the index needs to form sustained higher highs and higher lows and move above 54,400-54,600 for a trend reversal.
FII-DII Investment Flows
Provisional data from NSE shows Foreign Portfolio Investors (FPIs) were net buyers of domestic stocks to the tune of Rs 187.46 crore on Tuesday. Domestic Institutional Investors (DIIs) also turned net buyers, acquiring Indian equities worth Rs 684.33 crore.