India’s equity benchmarks are likely to open higher on Wednesday, buoyed by strong gains across Asian markets on strengthening bets for a US Federal Reserve rate cut.
However, muted Q2 earnings of India Inc and FIIs selling may sour the sentiments. Stellar listing of LG Electronics India also failed to boost the morale of markets.
Nifty futures on the NSE International Exchange traded 76 points, or 0.30 per cent, up at 25,282 hinting at a positive start for the domestic market on Wednesday. Asian stocks staged a tentative rebound on Wednesday. Nikkei and Hang Seng gained a per cent each, while KOSPI surged nearly 2 per cent.
Optimism over India-US trade discussions resurfaced as New Delhi is set to hold talks with Washington this week and has reportedly agreed to boost imports of US energy, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services. “Market are expected to remain range-bound, with global trends, FII flows, and Q2FY26 earnings likely to guide near-term direction.”
Wall Street ended mixed on Tuesday as investors digested varied cues. The S&P 500 declined 0.16 per cent to end the session at 6,644.31 points. The Nasdaq declined 0.76 per cent to 22,521.70 points, while the Dow Jones Industrial Average rose 0.44 per cent to 46,270.46 points.
In the broader currency market, the US dollar was on the defensive early on Wednesday after comments from Federal Reserve Chair Jerome Powell bolstered wagers on an interest rate cut this month. The dollar index was flat at 99.055.
In commodities, spot gold extended its record-breaking run and was last up 0.9 per cent at $4,179.80 an ounce, helped by geopolitical and economic uncertainties and the US rate cut expectations. Oil prices slipped, with Brent crude futures down 0.1 per cent to $62.33 a barrel, while US crude eased 0.07 per cent to $58.66 per barrel.
The decline was largely driven by renewed worries over US-China trade tensions and weak global cues, said Ajit Mishra, SVP of Research at Religare Broking. “Amid the volatility, we continue to maintain a tactical ‘buy on dips’ approach, focusing on stocks showing relative strength or limited decline for long trade opportunities,” he said.
Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 1,508.53 crore on Tuesday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 3,661.13 crore on a net-net basis.
Nifty50 outlook
Going forward, immediate support for Nifty lies around 25,050-25,000, coinciding with the 20-DEMA, said Rajesh Bhosale, Equity Technical Analyst at Angel One. “A sustained move below this zone could trigger further weakness. On the flip side, the 25300-25350 band remains a stiff resistance zone, and a decisive breakout above this would likely resume the upward momentum.”
Going ahead, the support zone of 25040-25000 will be crucial for Nifty50 as it is the confluence of the 20-day EMA level, A decisive break below the 25,000 mark could open the gates for further downside towards 24870, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities. “On the upside, the immediate resistance is placed in the 25,270-25,300 zone. A sustained move above this hurdle will be essential for the bulls to regain control.”
Nifty Bank outlook
Nifty Bank formed a bearish Harami candlestick pattern, indicating selling pressure at higher levels on the daily scale, said Hrishikesh Yedve, AVP Technical and Derivative Research at Asit C Mehta Investment Interrmediates. “On the downside, the major support for index is placed near 55,800, while resistance is placed near 57,000. Overall, we expect Bank Nifty to consolidate within the 55,800-57,000 range with positive bias in the short term,” he said.
Nifty Bank is to consolidate in the range of 55,600-57,000 in the coming sessions thus forming a base for the next leg of up move. It has immediate resistance at 57,000 levels, Bajaj Broking said. “A move above the same will open further upside towards all time highs placed around 57600 levels. Key support is placed at 55,500-55,700 levels being the confluence of the 20 days EMA.”