Indian equity markets are anticipated to open higher on Thursday, with the GIFT Nifty Futures on the NSE International Exchange showing a gain of 94.00 points, or 0.39 per cent, trading at 24,187.50. This positive sentiment is largely driven by a significant drop in crude oil prices, which followed reports of positive progress in indirect talks between Iran and the US concluded in Qatar on Wednesday.
Despite the encouraging start, a cautious bias is expected to prevail among investors. This stems from ongoing uncertainties surrounding the US-Iran negotiations and the impending commencement of June-quarter business updates. Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, noted that while resilient domestic fundamentals and easing input costs should provide downside support, investors are awaiting greater clarity.
Global Market Snapshot
US stocks closed slightly lower on Wednesday, primarily due to a decline in technology shares. However, gains in Meta Platforms helped limit the losses for the S&P 500 and Nasdaq. The Dow Jones Industrial Average dipped 0.03 per cent, the S&P 500 fell 0.22 per cent, and the Nasdaq Composite dropped 0.66 per cent.
Asian markets presented a mixed picture on Thursday. While the Hang Seng was up a per cent, the KOSPI dropped nearly 3 per cent, and the Nikkei was down a per cent, as currency and bond markets braced for upcoming US jobs data.
Commodity and Currency Movements
Oil prices reached new four-month lows, with Brent crude trading off 0.8 per cent at $71 a barrel. This decline was attributed to the positive US-Iran talks and increased oil tanker transits through the Strait of Hormuz. Gold saw a bounce of 0.5 per cent, reaching $4,050 an ounce after a challenging quarter. The US dollar index eased 0.02 per cent to 101.38, supported by higher Treasury yields.
Ajit Mishra, SVP of Research at Religare Broking, highlighted that market gains remained measured due to lingering uncertainty over the US-Iran peace negotiations and concerns about the domestic monsoon. He recommended a stock-specific approach, focusing on relative outperformers across sectors.
FII-DII Flows
Provisional data from the NSE revealed that Foreign Portfolio Investors (FPIs) were net sellers of Indian equities on Wednesday, offloading stocks worth Rs 1,140.50 crore. Conversely, Domestic Institutional Investors (DIIs) were net buyers, injecting Rs 3,159.24 crore into the market on a net-net basis.
Technical Outlook: Nifty50 & Sensex
According to Shrikant Chouhan, Head of Equity Research at Kotak Securities, the market formed a small bullish candle on daily charts and is holding a reversal formation on intraday charts. For day traders, 23,900/76,500 will serve as a key support level. Above this, bullish momentum is likely to continue, potentially moving towards 24,150-24,250/77,500-77,800. A break below 23,900/76,500 could accelerate selling pressure, retesting 23,800/76,200 or the 20-day SMA at 23,750/76,000. Chouhan suggests a level-based trading strategy given the current non-directional market texture.
Hitesh Tailor, Technical Research Analyst at Choice Equity Broking, noted that Sensex formed a small bullish candlestick, indicating sustained buying interest post-breakout. It continues to trade above its 20-Day EMA, maintaining a positive short-term trend with improving RSI momentum.
Rupak De, Senior Technical Analyst at LKP Securities, added that despite sideways movement, the short-term trend for Nifty remains positive. A bullish bias is likely to persist as long as Nifty holds above the 23,800 support level, with potential movement towards 24,200.
Technical Outlook: Nifty Bank
Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, observed that Nifty Bank formed a bullish candle on the daily chart and continues to trade comfortably above its key moving averages, reflecting a positive underlying trend. The RSI also edged higher, indicating a modest improvement in bullish momentum. Immediate resistance for Bank Nifty is in the 58,400-58,500 zone. A sustainable move above this could extend its pullback towards 58,900, followed by 59,300. Immediate support is placed in the 57,600-57,500 zone.
Bajaj Broking Research highlighted that Nifty Bank formed a bullish candlesticks pattern with a higher high and higher low, indicating buying demand around the recent breakout area. A move above last week's high of 58,700 could open further upside towards 59,200 and 60,000. Failure to move above this level might keep the index consolidating within the 57,000–58,500 range. The 57,000 mark is a crucial short-term support, and the overall bias remains positive, suggesting accumulation of quality banking stocks on dips.