Indian equity benchmark indices are anticipated to commence trading on a cautious note this Thursday, despite a generally positive rebound observed across global markets. GIFT Nifty Futures, trading on the NSE International Exchange, were down 49 points, or 0.16 percent, at 24,424.50, indicating a subdued start for domestic equities.
Global Cues and Market Sentiment
Overnight, US stocks largely ended higher on Wednesday, propelled by robust quarterly earnings reports and inflation data that reinforced expectations of the US Federal Reserve maintaining steady interest rates in September. The S&P 500 climbed 0.26 percent, the Nasdaq gained 0.54 percent, while the Dow Jones Industrial Average saw a slight decline of 0.04 percent.
Asian markets presented a mixed picture on Thursday, with South Korea's KOSPI soaring over 4.2 percent and Japan's Nikkei jumping 1.6 percent, following the US inflation data. However, Hong Kong's Hang Seng edged lower. A significant overhang for domestic equities remains the elevated crude oil prices, fueled by ongoing US-Iran tensions in the Strait of Hormuz. Oil prices eased slightly in Asia, with US crude at $82.58 a barrel and Brent at $88.35 per barrel, yet they remain high. The dollar index held steady at 99.93, while spot gold and silver saw minor gains.
Domestic Factors and Investor Activity
Investor sentiment continues to be subdued due to rising crude prices amidst renewed Middle East tensions and attacks on shipping, which raise concerns over global energy supplies. Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, noted that benchmark indices are likely to remain range-bound, though broader markets might experience stock-specific action as the Q1FY27 earnings season concludes. Traders are also closely monitoring upcoming India CPI and US CPI data.
Provisional data from the NSE revealed that Foreign Portfolio Investors (FPIs) were net sellers of domestic stocks, offloading Rs 1,002.50 crore on Wednesday. Conversely, Domestic Institutional Investors (DIIs) provided support, emerging as net buyers of Indian equities to the tune of Rs 5,841.66 crore.
Nifty, Sensex & Nifty Bank Technical Outlook
Sensex Outlook
Technically, the Sensex formed a bearish daily candle, but a long lower wick indicated buying interest at lower levels. After failing to hold 78,000, the index bounced from around 77,500, finding support near its 20-day and 100-Day EMAs. Sachin Gupta, VP of Technical Research at Choice Equity Broking, suggests the broader outlook remains sideways, consolidating between 77,250–77,500 (support) and 78,200–78,400 (resistance). A decisive move above the resistance zone could revive positive momentum.
Nifty50 Outlook
The Nifty managed to close above its 20-day Exponential Moving Average (EMA). However, the Relative Strength Index (RSI) indicator is in a bearish crossover, signaling weak momentum. Rupak De, Senior Technical Analyst at LKP Securities, indicates that a sustained fall below 24,400 could drag the index towards 24,180. On the upside, 24,500 is a crucial resistance, and a sustained move above this level could improve the trend. The Put-Call Ratio (PCR) at 0.81 reflects a cautious positioning bias, while India VIX remains subdued at 11.69.
Nifty Bank Outlook
Nifty Bank formed a sizeable bullish candle on the daily timeframe, with a minor lower wick pointing to strong buying interest at lower levels. Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, noted the index has reclaimed its 20-day EMA. Immediate resistance for Bank Nifty is in the 58,300-58,400 zone, with a sustained move above potentially extending gains towards 58,800 and 59,200. Immediate support is placed in the 57,500-57,400 zone. Bajaj Broking highlights that the broader 7-week consolidation range remains intact between 56,500 and 58,700, with a move above 58,000 opening upside towards 58,500-58,700.
Ajit Mishra, SVP of Research at Religare Broking, recommends maintaining a cautious, stock-specific approach, focusing on relatively stronger sectors and utilizing market declines selectively.