Indian Markets Brace for Negative Open
Indian equity benchmark indices are poised for a subdued start on Tuesday, signaled by GIFT Nifty Futures trading 44.20 points (0.18%) lower at 24,615.50 on the NSE International Exchange. This anticipated negative opening follows a decline in US stocks and persistent concerns over rising crude oil prices, which are curbing investor risk appetite despite supportive corporate earnings and renewed foreign institutional buying.
Global Cues and Economic Factors
US stock markets concluded Monday's session in the red, largely impacted by a fall in major chipmakers like Intel. Investor confidence waned regarding a potential agreement to reopen the Strait of Hormuz, contributing to the broader market downturn. The S&P 500 dipped 0.06% to 7,753.12 points, the Nasdaq fell 0.32% to 26,605.36 points, and the Dow Jones Industrial Average was down 0.11% at 53,976.04 points.
Asian shares also showed mixed performance amid ongoing uncertainty surrounding global inflation. While Nikkei gained over 2% and KOSPI rose almost half a percent, the Hang Seng edged lower. Crude oil prices strengthened, with Brent crude futures touching $88.00 per barrel and US crude futures reaching $82.45, both hitting their highest levels since July 31. This surge in oil prices, driven by fading hopes for a US-Iran peace agreement, poses a significant challenge for India in terms of foreign institutional investor (FII) outflows. The dollar saw a marginal lift from rising oil prices, while spot gold edged up 0.5% to $4,409.81 an ounce.
Expert Outlook on Nifty, Sensex, and Bank Nifty
Market analysts are closely watching key levels. Shrikant Chouhan, Head of Equity Research at Kotak Securities, noted that Nifty50 and Sensex traded between 24,500/78,300 and 24,650/78,700, indicating indecision. He suggests that 24,650/78,800 and 24,700/79,000 will act as immediate breakout levels, potentially leading to rallies towards 24,800–24,850 / 79,300–79,500. Conversely, a fall below 24,500/78,300 could accelerate selling pressure, retesting 24,400–24,350 / 78,000–77,800.
Sachin Gupta, VP of Technical Research at Choice Broking, observed a green daily candle for Sensex, indicating modest buying interest but resistance near the 200-day EMA at 78,624. A decisive close above this level could improve the technical structure. Rupak De, Senior Technical Analyst at LKP Securities, highlighted 24,650 as a crucial resistance for Nifty50, with support at 24,500. He anticipates range-bound movement, with the near-to-short-term trend remaining sideways to positive.
The Relative Strength Index (RSI) stands at 56, reflecting steady momentum, and India VIX settled at 12.24, suggesting low intraday volatility, according to Dhupesh Dhameja, Derivatives Research Analyst at SAMCO Securities.
Bank Nifty Analysis
Bank Nifty formed a second consecutive bearish candle, indicating profit booking and continued consolidation within last week’s 57,300–58,300 range. Bajaj Broking Research expects this consolidation to continue, with 58,000 acting as an immediate hurdle. Sustaining above 57,500–57,300 could trigger a pullback towards 58,300 and 58,700. A decisive break below this support band, however, could extend corrective moves towards 56,500.
Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, noted that the 58,000-58,100 zone is a critical hurdle for Bank Nifty. A breakout above 58,100 could signal a rally towards 58,600 and 59,200. The 50-day EMA, near 57,100-57,000, is expected to provide strong support, maintaining the broader bullish structure as long as the index sustains above it.
FII-DII Flows and Investment Strategy
Provisional data from NSE shows Foreign Portfolio Investors (FPIs) were net sellers of domestic stocks on Monday, offloading Rs 1,290.29 crore. Conversely, Domestic Institutional Investors (DIIs) turned net buyers, injecting Rs 1,974.76 crore into Indian equities. Ajit Mishra, SVP of Research at Religare Broking, advises a 'buy-on-dips' strategy, favoring stronger sectors and stocks while emphasizing disciplined risk and position management, supported by softer-than-expected US jobs data easing rate hike concerns.