Indian benchmark indices are set to open on a positive note on Wednesday amid positive global cues including a ceasefire between Iran & Israel. However, volatility may remain high on Dalal Street ahead of monthly expiry on Thursday. Falling crude and stable US dollar bode positive for Indian markets.
Nifty futures on the NSE International Exchange traded 108.80 points, or 0.43 per cent, lower at 25,180.50, hinting at a positive start for the domestic market on Wednesday. Asian stocks stabilised on Wednesday. Nikkei edged marginally lower, while KOSPI and Hang Seng rose up to half a per cent each.
The market attempted to break out of its recent consolidation range, persistent global risks continue to impede momentum, said Vinod Nair, Head of Research at Geojit Investments. “Going forward, the sustainability of an uptrend will hinge on the strength of domestic earnings, with optimism surrounding the upcoming Q1 results supported by favourable domestic macroeconomics.”
US stocks rallied on Tuesday as investors welcomed a fragile truce with Israel and Iran. The Dow Jones Industrial Average rose 507.24 points, or 1.19 per cent, to 43,089.02, the S&P 500 gained 67.01 points, or 1.11 per cent, to 6,092.18 and the Nasdaq Composite jumped 281.56 points, or 1.43 per cent, to 19,912.53.
Brent crude ticked up 81 cents to $67.95 per barrel, bouncing a bit following a plunge of as much as $14.58 over the previous two sessions. US West Texas Intermediate crude added 70 cents to $65.07 per barrel. The two-year US Treasury yield dipped to the lowest since May 8 at 3.787 per cent. The US dollar index slipped 0.1 per cent to 97.854.
Ajit Mishra, SVP of Research at Religare Broking said that rotational buying across key sectors, along with notable strength in the midcap and smallcap segments, continues to offer trading opportunities. “Participants are advised to maintain a positive yet cautious stance, with a strong focus on stock selection driven by sectoral trends,” it added.
Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 5,266.01 crore on Tuesday. On the other hand, domestic institutional investors (DIIs) remained buyers of Indian equities to the tune of Rs 5,209.60 crore on a net-net basis.
The global backdrop remains volatile, though easing crude prices and currency stability offer near-term comfort. S&P Global revised India’s FY25 GDP forecast upward to 6.5 per cent, signalling resilient domestic fundamentals, said Vikram Kasat, Head of Advisory at PL Capital. “Near-term market direction may hinge on geopolitical clarity and domestic earnings cues,” it said.
Nifty Outlook
A reasonable negative candle was formed on the daily chart with a long upper shadow. This market action indicates false upside breakout attempt of broader high low range of the last one month around 25200 levels, said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities. “The short-term trend of Nifty remains positive amidst range movement,” he said.
Shrikant Chouhan, Head of Equity Research at Kotak Securities believes that 25,000/82,000 would act as a key support zone for traders. “We expect a technical bounce back up to 25,200-25,300/82500-83,000. On the flip side, if the market falls below 25,000/82,000, it could extend the correction up to 24,850-24,800/81600-81500,” he adds.
Nifty Bank outlook
Bank Nifty formed a high wave candle with a higher high and higher low signaling positive bias. The index is to maintain positive bias and head towards the all-time high placed around 57,050 and 57,600 levels in the coming weeks, said Bajaj Broking. “Immediate bias remains positive above 55,400 levels being the confluence of recent consolidation area and last week low,” it said.
Nifty Bank showed continued strength, it encountered resistance near the 56,800 zone, aligning with the upper Bollinger Band, and has faced mild selling pressure during the latter half of the session, said Om Mehra, Technical Research Analyst at SAMCO Securities. “Until a clean breakout occurs above 56,850, the trend remains choppy and sideways. The support is placed near 55,700.”
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