Indian equity markets are poised for a muted start on Thursday, with GIFT Nifty futures indicating a flat opening. Investors are weighing the positive impact of declining oil prices against the US Federal Reserve's decision to hold interest rates steady, while acknowledging the possibility of future rate hikes.
Global Cues and Market Sentiment
Oil prices saw a dip, with US crude falling 1.25% to $75.83 a barrel and Brent crude down 1.4% to $78.41. This decline has improved overall market sentiment, alleviating concerns about inflation and external sector pressures, according to Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services. However, the prospect of higher US rates could temper risk appetite for emerging markets like India.
Asian markets presented a mixed picture, with Nikkei gaining nearly 2% and KOSPI up 1%, while the Hang Seng edged lower. In the US, the S&P 500, Nasdaq, and Dow Jones Industrial Average closed lower on Wednesday, as traders reacted to comments from a new Fed Chair hinting at the need to curb inflation.
FII-DII Activity and Expert Views
Provisional data from the NSE shows Foreign Portfolio Investors (FPIs) were net sellers of domestic stocks, offloading Rs 101.59 crore on Wednesday. Conversely, Domestic Institutional Investors (DIIs) showed strong buying interest, acquiring Indian equities worth Rs 1,561.40 crore on a net basis.
Ajit Mishra, SVP of Research at Religare Broking, noted that easing crude prices and expectations of a Fed status quo supported risk sentiment. He advises a stock-specific approach, focusing on outperformers and disciplined risk management.
Nifty50 and Sensex Outlook
Analysts maintain a positive short-term outlook for the Indian market, citing an uptrend continuation formation on daily charts. Shrikant Chouhan, Head of Equity Research at Kotak Securities, identifies 24,000 for Nifty and 77,000 for Sensex as crucial support levels. A rally towards 24,200-24,300/77,500-77,800 is expected if these levels hold. A breach below these supports could trigger an intraday correction towards 23,900-23,850/76,700-76,500.
Hitesh Tailor, Technical Research Analyst at Choice Equity Broking, observed that Sensex formed a bullish candle, sustaining above its key short-term moving averages, indicating the uptrend remains intact. For Nifty, Rupak De, Senior Technical Analyst at LKP Securities, sees 24,000 as immediate support. A break below this could lead to a correction to 23,800, while a decisive move above 24,100 may pave the way for 24,300.
Nifty Bank Analysis
Despite some profit booking, the Nifty Bank index maintains a firmly bullish broader trend, trading above its key moving averages. Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, highlights strengthening bullish momentum indicated by rising green histogram bars on the MACD.
Immediate resistance for Bank Nifty is pegged at the 57,900-58,000 zone. A sustainable move above this could extend the pullback towards 58,400, followed by 58,800. On the downside, immediate support is in the 57,100-57,000 zone. Bajaj Broking Research notes that Nifty Bank is consolidating within its recent range, supported by a bullish crossover of the 20-day EMA above the 50-day EMA, targeting 58,300 and 59,000 in coming weeks. Dips are seen as buying opportunities, with a decisive breach below 55,500 negating the positive outlook.