Indian equity benchmark indices are anticipated to commence trading on a positive note today, influenced by favorable global market signals. GIFT Nifty futures indicated a robust start, rising by 68.10 points, or 0.29 percent, to reach 23,530.50 on the NSE International Exchange.
Global Cues and Investor Sentiment
Globally, Asian markets saw gains, driven by enthusiasm around artificial intelligence, with the KOSPI and Hang Seng each up by one percent, and the Nikkei rising by nearly half a percent. US stocks also mostly advanced, particularly tech shares linked to AI, pushing the S&P 500 up by 0.58 percent and the Nasdaq Composite by 1.20 percent. However, the Dow Jones Industrial Average registered a slight decline.
Despite the positive international backdrop, domestic market upside may be limited. Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, noted that elevated Brent crude prices (around $105.76 a barrel) and a weakening Indian rupee continue to create a fragile environment, contributing to investor concerns. Geopolitical tensions, such as the US-Iran conflict, alongside persistent foreign institutional investor (FII) outflows, further fuel a cautious undertone.
Provisional data revealed that FIIs were net sellers of domestic stocks, offloading shares worth Rs 4,703.15 crore on Wednesday. Conversely, domestic institutional investors (DIIs) provided support, becoming net buyers of Indian equities to the tune of Rs 5,869.05 crore.
Nifty50 and Sensex Technical Outlook
Technically, the market saw a pullback rally but failed to surpass critical resistance levels. Shrikant Chouhan, Head of Equity Research at Kotak Securities, observed that Nifty's inability to close above the 23,500 mark is a negative signal, suggesting further weakness. He highlighted 23,350 as an immediate support zone, with 23,250 as the next potential retest level. On the upside, 23,500-23,700 serves as a resistance zone.
For the Sensex, Aakash Shah, Research Analyst at Choice Equity Broking, indicated temporary stabilization after recent selling pressure, forming a small bullish candle. Immediate support for the Sensex is positioned between 73,700 and 73,900, while resistance is near 75,300-75,500. A decisive move above this resistance could trigger further recovery.
Rupak De, Senior Technical Analyst at LKP Securities, added that Nifty's daily Relative Strength Index (RSI) remains in a bearish crossover, reinforcing the negative momentum. The 23,500 zone continues to be a strong resistance, and the index may stay under pressure in the near term, with immediate support around 23,150-23,200.
Nifty Bank Analysis
The Nifty Bank index experienced a gradual rebound but formed a small-bodied bearish candle, reflecting indecision. Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, noted the index's position in the lagging quadrant of the Relative Rotational Graph, indicating weak relative strength. Immediate support for Nifty Bank is identified in the 53,100-53,000 zone. A sustained move below this could extend weakness towards 52,600 and 52,300. Resistance is placed in the 53,800-53,900 zone.
Bajaj Broking further commented that Nifty Bank's formation of a high wave candlestick pattern, with a lower high and lower low, signals a continuation of its downtrend for the fourth consecutive session. A breakdown below 54,400 could open further downside towards 52,700-52,400 levels.