Indian benchmark indices are staring at a gap-up opening on Wednesday amid the optimism over the US-India trade deal. US President Donald Trump posted that both the nations are negotiating and a deal will be announced soon. The gains in the global stocks will also cast their impact on the Indian stocks.
Nifty futures on the NSE International Exchange traded 77.20 points, or 0.31 per cent, up at 25,027.50, hinting at a positive start for the domestic market on Wednesday. Asian stocks were trading higher in early trade. KOSPI surged more than 1.5 per cent, while Hang Seng was up nearly a per cent. Nikkei advanced nearly half a per cent.
India is progressing on multiple trade negotiations. We expect markets to remain range-bound, tracking developments around trade agreements and the outcome of the US Fed rate decision, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services.
Wall Street’s three main indexes scored record high closes on Tuesday. The S&P 500 climbed 0.27 per cent to end the session at 6,512.61 points, surpassing its record last Thursday. The Nasdaq gained 0.37 per cent to 21,879.49 points, its second consecutive record high close. The Dow Jones Industrial Average rose 0.43 per cent to 45,711.34 points.
Oil prices rose on Wednesday after Israel attacked Hamas leadership in Qatar and US President Donald Trump asked Europe to impose tariffs on buyers of Russian oil, but a weak market outlook capped gains. Brent crude futures rose 0.53 per cent, to $66.74 a barrel, while U.S. West Texas Intermediate crude futures gained 0.57 per cent to $62.99 a barrel.
The US dollar was steady on Wednesday, holding onto overnight gains as traders braced for crucial inflation reports this week that could help define the size and scope of interest rate cuts from the Federal Reserve for next week and beyond. The dollar index was steady at 97.834 after gaining 0.3 per cent on Tuesday.
“We maintain a positive yet cautious outlook on the Nifty and suggest closely tracking the performance of banking and IT majors for further cues. Traders should continue with a ‘buy on dips’ approach in the leading sectors while ensuring a favorable risk-reward balance,” said Ajit Mishra, SVP of Research at Religare Broking.
Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 2,050.46 crore on Tuesday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 83.08 crore on a net-net basis.
Nifty & Sensex outlook
Sentiment looks positive in the short term, with Nifty sustaining above the 21-EMA for the past few sessions. RSI is in a bullish crossover and holding above 50, said Rupak De, Senior Technical Analyst at LKP Securities. “In the near term, Nifty may move towards 25,000 and beyond, while support on the lower end is placed at 24,750–24,700,” he said.
We are of the view that currently the market is experiencing positive consolidation. For day traders, the key support zone is now 24,800-24,750/80,900-80,750. As long as the market trades above this, the bullish sentiment is likely to continue, said Shrikant Chouhan, Head of Equity Research at Kotak Securities.
“On the higher side, 25,000/81,500 would act as a crucial resistance zone. A successful breakout above 25,000/81,500 could push the market up to 25,100-25,150/81,800-82,000. Conversely, below 24,750/80,750, the uptrend would become vulnerable,” he added.
Nifty Bank outlook
Nifty Bank formed a small red candle. On the downside, the 200-DEMA is placed near 53,600 while the low of the bullish engulfing candle is near 53,560, making the 53,560–53,600 zone a strong demand area. As long as the Bank Nifty sustains above this zone, a buy-on-dips strategy is more favourable, said Hrishikesh Yedve, AVP of Technical and Derivative Research at Asit C Mehta Investment Interrmediates
The zone of 54,400-54,500 will act as an immediate hurdle for Nifty Bank, said Sudeep Shah, Head of Technical Research and Derivatives at SBI Securities. “On the downside, the zone of 53,800-53,700 will act as crucial support for the index. If the index slips below the 53,700 level, then the next crucial support is placed at the 53,200 level,” he said.
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