Indian equity benchmark indices, which have logged four straight sessions of losses, are likely to open little changed on Thursday as concerns over foreign outflows and US visa curbs could keep investors cautious.
Traders are awaiting Q2 earnings and the trade deal between the US and India.
Nifty futures on the NSE International Exchange traded 36.40 points, or 0.15 per cent, down at 25,075.50, hinting at a negative start for the domestic market on Thursday. Asian shares took a breather from their recent rally on Thursday as investors positioned for month- and quarter-end flows. Nikkei and Hang Seng were up marginally, while KOSPI was slightly down.
Overall, while festive demand and GST-led structural reforms provide support, currency weakness and global headwinds including uncertainty related to India-US trade deal are likely to keep markets range-bound in the near term, Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services.
US stocks closed lower for a second straight session on Wednesday. The Dow Jones Industrial Average fell 171.50 points, or 0.37 per cent, to 46,121.28, the S&P 500 shed 18.95 points, or 0.28 per cent, to 6,637.97 and the Nasdaq Composite dropped 75.62 points, or 0.33 per cent, to 22,497.86.
The dollar index was at 97.813, hovering near a three-week high. The index is on the cusp of eking out a gain for the month. In commodity markets, spot gold prices were flat at $3,739 an ounce, having slipped 0.7 per cent overnight in the face of a strong dollar. US crude slipped 0.4 per cent to $64.73 a barrel, while Brent was off 0.3 per cent at $69.11.
A temporary breather cannot be ruled out but upside is likely to stay capped until private banks and IT show signs of recovery, said Ajit Mishra, SVP of Research at Religare Broking. “We advise maintaining selective exposure, focusing on stocks demonstrating resilience through time-wise correction, while keeping position sizes moderate until clear signs of trend resumption emerge,” he said.
Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 1,211.68 crore on Wednesday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 2,425.75 crore on a net-net basis.
Nifty & Sensex outlook
The intraday market texture is weak, but a fresh selloff is possible only after the dismissal of the 25,000/81,500 level. Below this, the market could slip to 24,900-24,810/81,200-81,000, said Shrikant Chouhan, Head Equity Research, Kotak Securities. “On the flip side, above 25,100/82,000, the pullback move could extend up to 25,200-25250/82,300-82,500,” he said.
A sustained move below 25,000 can lead to the throwback extending further in the Index towards 24,800, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities. “On the upside, the zone of 25,150-25,200 is likely to act as an immediate resistance. Any follow through buying above this zone can lead to resumption of uptrend in Nifty50.”
Nifty Bank outlook
Nifty Bank formed a red candle, highlighting persistent selling pressure. On the downside, immediate support is placed at 54,800, followed by 54,500, said Hrishikesh Yedve, AVP Technical and Derivative Research, Asit C. Mehta Investment Interrmediate. “On the upside, the zone of 56,000-56,160 will act as a significant resistance. Adopting a buy-near-support and sell-near-resistance approach is recommended in Nifty Bank for the short term,” he said.
“We expect Nifty Bank to continue consolidating within the 54,700-56,000 range in the near term. Immediate support is seen at 54,700-54,900, which aligns with last week’s low and the 20-day EMA. A more significant support level is placed near 54,000, representing a key retracement level of the recent rally,” said Bajaj Broking.