Indian equity benchmark indices are poised to open on a flat note on Friday and close October with strong gains, buoyed by optimism over corporate earnings, foreign inflows and easing global trade tensions.
Traders will be looking at trade deal development with the US by India and China.
Nifty futures on the NSE International Exchange traded 2.6 points, or 0.01 per cent, down at 26,029, hinting at a flat start for the domestic market on Friday. Asian shares are set for a seventh straight month of gains on Friday. Nikkei jumped more than a per cent, while KOSPI was up half a per cent. Hang Seng was seen lower.
Indian markets enter the final trading day of the week – and the month – on a cautious note after Nifty and Sensex suffered a heavy selloff yesterday. The much-anticipated Xi-Trump meeting and the US Fed’s 25 bps rate cut failed to lift sentiment, reflecting a classic ‘buy on rumour, sell on fact’ trend, said Prashanth Tapse, Senior VP of Research at Mehta Equities..
US stocks dropped on Thursday, weighed down by megacaps Microsoft and Meta. The Dow Jones Industrial Average fell 109.88 points, or 0.23 per cent, to 47,522.12, the S&P 500 fell 68.25 points, or 0.99 per cent, to 6,822.34 and the Nasdaq Composite dropped 377.33 points, or 1.57 per cent, to 23,581.14.
Oil prices slipped and were headed for a third straight month of declines as a stronger dollar capped commodities gains and rising supply from major producers offset the impact of Western sanctions on Russian exports. Brent crude futures slipped 0.5 per cent to $64.67 a barrel, while US West Texas Intermediate crude was at $60.22 a barrel, down 0.6 per cent.
The rise in yields offered support to the US dollar although resistance seems heavy at 99.564 and 100.25. Spot gold prices held a 2.4 per cent overnight gain at $4,033.48 per ounce but were still down almost 2 per cent for the week and well below its record high of $4,381 hit just last week.
Sentiment weakened after the US Fed signaled that its latest rate cut could be the final move for 2025, dampening global risk appetite, said Ajit Mishra, SVP of Research at Religare Broking. “Participants should focus on stock-specific opportunities in sectors and themes and use the ongoing correction to accumulate quality names on dips.”
Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 3,077.59 crore on Thursday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 2,469.34 crore on a net-net basis.
Nifty50 & Sensex outlook
The market is witnessing range-bound activity and level-based trading would be the ideal strategy for day traders, said Shrikant Chouhan, Head of Equity Research at Kotak Securities. “As long as the market is trading below 26,000/84,500, the weak sentiment is likely to continue on the downside, with the market potentially slipping to 25,800/84,200. Further downside may also continue, which could drag the market to 25,720/84,000.”
Nifty50 formed a bearish candlestick pattern with a lower high and lower low signaling profit booking at higher levels near 26,100 levels. In the last six sessions, on expected lines Nifty has been moving sideways within a range of 26,100-25,700, and this consolidation is likely to extend, said Bajaj Broking.
“A breakout above 26,100 could push the index towards its previous all-time high of 26,277 and then to 26,500 in the near term. The broader market trajectory continues to exhibit a bullish bias, reaffirming that the primary uptrend remains firmly in place. Strong support is seen around 25,700-25,500, which is likely to hold as it marks the recent breakout zone,” it said.
Nifty Bank outlook
Despite this intraday weakness, Nifty Bank continues to trade above its key moving averages, keeping the broader uptrend intact. On the downside, immediate support is placed at 58,000, followed by 57,700 and 57,500, said Hardik Matalia, Derivative Analyst Research at Choice Equity Broking.
“A break below these levels could lead to further short-term pressure. On the upside, resistance is seen at 58,300, followed by 58,500. A decisive move above 58,500 could help the index resume its upward trajectory, reaffirming strength in the banking space,” he said.
The zone of 57800-57700 will act as an important support for Nifty Bank. While, on the upside, the zone of 58,300-58,400 will act as a crucial hurdle. Any sustainable move above the level of 58,400 will lead to a sharp upside rally upto the level of 59,000 in the short term, Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities.