Indian equity benchmark indices are anticipated to open higher on Thursday, buoyed by positive global cues and continued institutional buying. GIFT Nifty Futures on the NSE International Exchange showed a gain of 88.20 points, or 0.37 percent, reaching 24,088.50, signaling a potential upward trajectory for the domestic market.
Global Market Movements and Cues
Wall Street saw advances on Wednesday as investors sought out undervalued stocks and sectors following recent risk-off movements. The Dow Jones Industrial Average rose by 0.56 percent, the S&P 500 gained 0.46 percent, and the Nasdaq Composite jumped 0.45 percent. This rebound was partly driven by renewed interest in AI-related technology stocks, despite persistent inflation concerns.
Asian markets also staged a relief rally on Thursday, with South Korea's KOSPI, Hong Kong's Hang Seng, and Japan's Nikkei all adding about one percent each.
Factors Influencing Investor Sentiment
Despite the positive opening cues, market sentiments may remain cautious due to ongoing concerns. Rising crude oil prices, escalating bond yields, and a strong dollar index are exerting pressure. Brent crude surged following increased tensions in the West Asian conflict, while global bond yields hit multi-year highs amid fears of a US interest rate hike. Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, noted that these factors add to the pressure on global equities.
US crude prices fell slightly to $90.74 a barrel, and Brent crude dipped to $95.21 per barrel. Spot gold saw a modest gain to $4,400.47 an ounce, while spot silver rose to $65.65 an ounce. The dollar eased against a basket of currencies, and the yield on benchmark US 10-year notes fell to 4.784 percent.
Institutional Flows and Market Advice
Provisional data from the NSE revealed that Foreign Portfolio Investors (FPIs) turned net buyers of domestic stocks on Wednesday, injecting Rs 6,688.37 crore. Domestic Institutional Investors (DIIs) also showed buying interest, with a net inflow of Rs 2,812.98 crore.
Ajit Mishra, SVP of Research at Religare Broking, advised investors to maintain a cautious stance, keep position sizes light, and focus on disciplined risk management amid rising volatility and global uncertainty, especially following heightened Middle East tensions.
Nifty50, Sensex & India VIX Outlook
The broader market outlook remains sideways with a cautious undertone. Sachin Gupta, VP of Technical Research at Choice Equity Broking, highlighted that for Sensex, holding the 76,100–76,300 support zone is crucial for sustained recovery, with a move above 76,800–77,000 potentially signaling further strength.
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, noted that a small green candle formed on the daily chart indicates a weak trend, suggesting a 'sell on rise' opportunity. He identified strong overhead resistance around 24,100-24,200 for Nifty, with further weakness below 23,800 potentially dragging it down to 23,600.
India VIX, a volatility index, rose 3.60 percent to 11.59, indicating increased hedging activity and suggesting elevated near-term volatility, according to Dhupesh Dhameja, Derivatives Research Analyst at SAMCO Securities.
Nifty Bank Outlook
For Nifty Bank, Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, placed immediate support at the 56,800-56,700 zone, coinciding with the 200-day EMA. A sustainable move below this could lead to weakness towards 56,400 and 56,000, while immediate resistance is around 57,500-57,600.
Pabitro Mukherjee, DVP of Research at Bajaj Broking, observed that Nifty Bank formed a high wave candle, signaling consolidation between 56,500 and 58,700. Sustaining above 58,000 could open upside towards 58,500-58,700. Conversely, a failure to sustain above 58,000 would indicate consolidation within the 57,000-58,000 range, with a breach below 57,000 potentially extending declines towards the 56,500-56,200 key short-term support area.