India’s equity benchmarks are set for a muted start on Wednesday amid the rising caution ahead of the US Federal Reserve’s policy decision, delay in India-US trade deal and muted quarterly earnings by India Inc. Consistent FIIs selling is also denting the sentiments at Dalal Street.
Nifty futures on the NSE International Exchange traded 39.30 points, or 0.16 per cent, down at 24,799.50, hinting at a negative start for the domestic market on Wednesday. Asian stocks rose modestly on Wednesday, with investors cautious. KOSPI rose 0.85 per cent, while Nikkei was up 0.03 per cent. Hang Seng was down 0.20 per cent.
Investor sentiment remains cautious ahead of key global events, including policy decisions from the US Fed and the August 1 reciprocal tariff deadline, said Vinod Nair, Head of Research at Geojit Investments. “Sustenance of this rally is likely to be positive in the near term with an eye on the above details, including Q1 results and this week’s monthly expiry,” he added.
US stocks closed lower on Tuesday after some disappointing corporate earnings. The Dow Jones Industrial Average fell 204.57 points, or 0.46 per cent, to 44,632.99, the S&P 500 lost 18.91 points, or 0.30 per cent, to 6,370.86 and the Nasdaq Composite shed 80.29 points, or 0.38 per cent, to 21,098.29.
The dollar’s surge since the US-European Union trade deal seems a little counterintuitive at first glance. The dollar index at 98.815, hovering near a one-month high. The index is set to record its first month of gains this year. The yield on benchmark 10-year Treasury notes was 4.328 per cent, the lowest level since July 3.
In commodities, Oil prices rose as potential supply shortages came into focus after Trump gave Moscow an abbreviated deadline toward ending the war in Ukraine. Brent crude futures rose 14 cents, or 0.19 per cent, to $72.65 a barrel. Spot gold rose 0.4 per cent to $3,327.69 per ounce.
Participants should avoid reading too much into a single-day bounce and remain focused on selective stock picking and disciplined trade management, said Ajit Mishra, SVP of Research at Religare Broking. “Moreover, the upcoming derivatives expiry and global developments could add to market volatility in the near term,” he said.
Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 4,636.60 crore on Tuesday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 6,146.82 crore on a net-net basis.
Nifty & Sensex outlook
A hidden positive divergence is visible on the daily chart, further indicating the potential for a smart recovery in the short term, said Rupak De, Senior Technical Analyst at LKP Securities. “On the higher side, Nifty may move towards 24,950-25,000. A decisive move above 25,000 could trigger a rally towards 25,200. On the downside, support is placed at 24,750,” he said.
“We are of the view that 24,700/81,000 and 24,650/80,900 will act as key support zones for day traders. As long as the market trades above these levels, the pullback formation is likely to continue,” said Shrikant Chouhan, Head of Equity Research at Kotak Securities. “On the higher side, 25,000-25,075/82,000-82,200 would be the key resistance zones for the bulls.”
Nifty Bank outlook
Nifty Bank sustaining below the same will maintain corrective bias and is likely to extend decline towards the 55,500 marks in the near term, said Bajaj Broking. “The 55,500-55,000 region emerges as a critical support cluster, coinciding with the 100-day EMA and key Fibonacci retracement levels of the prior up move-underscoring it as a high-probability demand zone where buyers may look to re-enter, potentially arresting the ongoing decline,” he said.
Mandar Bhojane, Senior Technical & Derivative Analyst – Research at Choice Equity Broking said that if Nifty Bank sustains above 56,275, it can extend gains towards 57,000 and 57,630. Conversely, support is placed at 55,500-55,150. The broader structure suggests a bullish bias, and any dip in Bank Nifty can be used as a buying opportunity, he said.