Stock market today: Gift Nifty down 23 points; key levels to watch for Nifty & Bank Nifty

Indian benchmark indices are set to open on a muted note on Friday on the back feeble global cues around geopolitical concerns in the Middle East. Volatility is likely to grip Dalal Street ahead of the weekend. Rising crude oil price and firm US dollar does not bode well for the emerging markets including India.

Nifty futures on the NSE International Exchange traded 23.10 points, or 0.09 per cent, lower at 24,780.50, hinting at a muted start for the domestic market on Friday. Share markets in Asia struggled for direction on Friday. Nikkei was marginally lower, while Hang Seng and KOSPI were trading nearly a per cent higher. Shanghai was seen flat.

Markets may see a steady opening with a positive bias, investors are likely to be in wait-and-see mode amidst escalating Middle East conflicts. Bulls have been working hard to float above the dotted lines but towards close ended on an uninspiring note, said Prashanth Tapse, Senior VP of Research at Mehta Equities. “Investors should not expect a quick end to this Middle-East conflict.”

US stocks observed a holiday on Thursday on the account of Juneteenth. Overnight, Israel bombed nuclear targets in Iran, and Iran fired missiles and drones at Israel as a week-old air war intensified with no sign yet of an exit strategy from either side.

Brent fell 2 per cent on Friday to $77.22 per barrel, but is still headed for a strong weekly gain of 4 per cent, following a 12 per cent surge the previous week. Gold prices eased 0.2 per cent to $3,363 an ounce, but were set for a weekly loss of 2 per cent.

The dollar was set to log its biggest weekly rise in over a month on Friday, as uncertainties about a raging war in the Middle East and the repercussions it could have on the global economy fuelled an appetite for traditional safe havens. The dollar index comparing the US currency against six others is poised for a 0.5 per cent climb this week.

“We expect the market to remain in consolidation mode, following the global market cues and developments on the geo-political front; while there could be heightened volatility in case of further escalation in the Israel-Iran conflict,” said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services.

Provisional data available with NSE suggest that FPIs turned net buyers of domestic stocks to the tune of Rs 934.62 crore on Friday. On the other hand, domestic institutional investors (DIIs) remained buyers of Indian equities to the tune of Rs 605.97 crore on a net-net basis.

The strength in the benchmark index does not reflect the underlying market tone, as we are witnessing gradual profit booking across sectors and in the broader market, said Ajit Mishra, SVP of Research at Religare Broking. “Further deterioration is likely if crude sustains above the $80. We reiterate our cautious view and advise closely monitoring positions until we see further clarity.”

Nifty outlook

Nifty remains in a consolidation phase. The 24,700 serves as a key support on the downside. A decisive close below this critical support of 24,700 could intensify selling pressure and drag the index towards the next support range of 24,500-24,400 levels in the short term, said Nandish Shah, Deputy Vice President at HDFC Securities. “On the higher side, the 25,000 continues to act as a strong resistance.”

The Nifty witnessed a lackluster expiry as the index remained within a narrow range throughout the session, indicating indecisiveness ahead of any directional move, said  Rupak De, Senior Technical Analyst at LKP Securities.

“On the hourly chart, the index continues to trade below the 200-DMA, reflecting weak market sentiment. On the daily chart, it has slipped below the 21-EMA, further reinforcing the bearish outlook. This negative sentiment is likely to persist as long as the index remains below 24,850. On the downside, support is seen at 24,550,” he adds.
 

Nifty Bank outlook

Bank Nifty formed a bear candle with a small upper shadow signaling consolidation amid ongoing geo-political tension. From a structural standpoint, a sustained breakout and close above the 56,000 psychological marks would be essential to unlock further upside potential, with the index likely to gravitate towards the 56,600–57,000 resistance zone, said Bajaj Broking.

Nifty Bank has struggled against the falling trendline resistance. The index remains within a contracting channel, as seen on the hourly chart. Despite multiple attempts, bulls have been unable to reclaim higher ground, while bears continue to test patience with a gradual drift toward the lower end of the channel, said Om Mehra, Technical Research Analyst at SAMCO Securities.