Indian equity benchmark indices are anticipated to open with minimal gains on Tuesday, reflecting a cautious sentiment despite a positive close for US stocks on Monday. The GIFT Nifty Futures indicated a flat start for domestic markets, moving up by 14.60 points, or 0.06 per cent, to 23,987.50 on the NSE International Exchange.
A primary focus for investors today will be the ongoing diplomatic efforts between the United States and Iran in Doha, which have helped ease recent geopolitical tensions. Additionally, heavyweight HDFC Bank is in the spotlight following its announcement of a new part-time chairman and chief financial officer.
Global Market Performance & Key Influences
US stocks closed sharply higher on Monday, benefiting from de-escalating US-Iran hostilities and a rebound in major technology shares. The Dow Jones Industrial Average rose 0.59 per cent, the S&P 500 gained 1.18 per cent, and the Nasdaq Composite surged 2.07 per cent.
In Asia, markets presented a mixed picture on Tuesday as the quarter drew to a close. While Japan's Nikkei and South Korea's KOSPI advanced, Hong Kong's Hang Seng index saw a decline of approximately one per cent.
Commodities and Currency Trends
Brent crude futures have retreated to pre-conflict levels, trading around $72.49 a barrel, offering a favourable outlook for India, one of the world's largest oil importers. The dollar index stood at 101.6 and is on track for a 1.3 per cent increase for the second quarter. The strengthening dollar has, however, contributed to gold experiencing its most significant quarterly fall in over a decade.
Investor Activity and Analyst Insights
Provisional data from the NSE revealed that Foreign Portfolio Investors (FPIs) were net sellers of Indian equities on Monday, offloading shares worth Rs 1,350.10 crore. Conversely, Domestic Institutional Investors (DIIs) showed strong buying interest, acquiring Indian equities worth Rs 2,801.45 crore on a net basis.
Analysts suggest a cautious yet optimistic approach amid renewed geopolitical risks in West Asia. Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, emphasized that geopolitical developments would remain a key driver until greater clarity emerges on the ceasefire's durability. Ajit Mishra, SVP of Research at Religare Broking, advised a stock-specific approach with disciplined risk management in the prevailing volatile environment.
Nifty50 & Sensex Outlook
The market experienced selling pressure at higher levels on Monday, forming a bearish candle on daily charts. Shrikant Chouhan, Head of Equity Research at Kotak Securities, identified 24,000 for Nifty and 76,800 for Sensex as immediate reference points. Below these levels, Nifty could retest 23,800-23,750, and Sensex 76,200-76,000. On the upside, a rally towards Nifty 24,150-24,200 and Sensex 77,300-77,500 is possible above these levels. Chouhan recommended a level-based trading strategy due to the non-directional intraday texture.
Aakash Shah, Research Analyst at Choice Equity Broking, noted that Sensex slipping below 77,000 indicates a temporary loss of bullish momentum. Immediate resistance for Sensex is in the 77,300-77,400 zone, with a decisive move above it needed for a recovery towards 77,500-77,800.
Rupak De, Senior Technical Analyst at LKP Securities, highlighted that volatility might remain elevated due to the NSE monthly expiry. He maintained a constructive short-term trend as long as Nifty holds above the 23,800 support level, advocating a 'buy-on-dips' strategy. Immediate resistance for Nifty is seen at 24,200.
Nifty Bank Outlook
The Nifty Bank index also formed a bearish candle but continues to trade above its key moving averages, signaling underlying strength, according to Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities. The daily RSI remains above the 60 mark, indicating strong momentum. Shah pointed to 57,300-57,200 as immediate support, with a sustained breakdown potentially dragging the index to 56,600. Resistance is expected in the 58,200-58,300 range.
Bajaj Broking Research observed a small bearish candlestick pattern for Nifty Bank, indicating consolidation around 58,000 levels. The bias remains positive, suggesting that dips towards the 57,000 support area should be viewed as buying opportunities for a gradual move towards 59,200. The daily stochastic in an uptrend further supports this positive bias.