Stock market today: Gift Nifty down 130 pts; key levels for Nifty, Sensex & Nifty Bank

Indian stock markets are staring at a gap down opening on Tuesday after a stellar rise on Monday on the back of positive and domestic cues including trade deal relief between US and China and ceasefire between India and Pakistan. However, several factors including inflation, Q4 earnings and FIIs flow are likely to guide the markets in the near-term.

Nifty futures on the NSE International Exchange traded 130.10 points, or 0.52 per cent, lower at 24,914, hinting at a negative start for the domestic market on Tuesday. Most Asian stocks were trading sharply higher on Tuesday as Japan’s Nikkei surged 1.7 per cent. KOSPI and ASX 200 were also up 0.65 per cent. However, Hang Seng was down 1.25 per cent in the early trade.

Sudden easing of the US-China tariff war unlocked multiple investment avenues for investors.  Sustained foreign institutional investor (FII) inflows, along with a resurgence in retail participation fuelled by expectations of a swift improvement in business sentiment, propelled today’s upside, said Vinod Nair, Head of Research at Geojit Investments.

“However, while the momentum remains strong, the market may enter a phase of consolidation in the near term as investors await concrete signs of earnings growth. In the meantime, mid & small caps are expected to maintain the optimism in the broad market,” he added.

Wall Street’s three major indexes rose sharply on Monday on the back of 90-day tariff relief. The S&P 500 gained 3.26 per cent to finish at 5,844.19, its highest close since March 3 while the Nasdaq Composite soared 4.35 per cent, to 18,708.34 for its highest finish since February 28. The Dow Jones Industrial Average 2.81 per cent to 42,410.10 for its highest close since March 26.

Oil prices eased on Tuesday from a two-week high reached during the previous session after the US and China agreed to temporarily slash tariffs. Brent crude futures dropped 0.2 per cent to $64.82 per barrel, while US West Texas Intermediate (WTI) crude fell 0.2 per cent to $61.82.

The dollar held strong gains on Tuesday as investors cheered a tariff deal between the world’s two largest economies that had fed fears of a global recession. Against a basket of currencies, the dollar hovered near a one-month high and was last at 101.67 . Spot gold prices fell 2.95 per cent to $3,228.31 an ounce.

The easing of geopolitical concerns and progress on global trade talks brought significant relief to the markets, reflected in a sharp drop in the India VIX volatility index, said Ajit Mishra – SVP, Research, Religare Broking. In light of the widespread buying momentum, a ‘buy on dips’ strategy remains prudent. Investors should focus on selecting stocks based on the relative strength of specific sectors and prevailing market themes,” he added.

Provisional data available with NSE suggest that FPIs turned net buyers of domestic stocks to the tune of Rs 1,246.48 crore on Monday. On the other hand, domestic institutional investors (DIIs) turned net sellers  of Indian equities to the tune of Rs 1,448.37 crore.

Nifty & Sensex outlook
Nifty has broken out of recent consolidation across multiple timeframes, confirming a positive trend, said Rupak De, Senior Technical Analyst at LKP Securities. “Going forward, any dips are likely to be bought into as long as the index remains above 24,350. On the higher end, this leg of the rally might extend towards 25,350/25,750 in the short term,” he said.

A long bullish candle on daily charts and breakout continuation formations on daily and intraday charts indicate a further uptrend from the current levels. For day traders, buying on intraday dips and selling on rallies would be the ideal strategy, said Shrikant Chouhan, Head – Equity Research, Kotak Securities.

“We believe that the 24,590/81,150 resistance zone has now become a strong support zone for short-term traders. On the higher side,25,200–25,300/83,000-83,300 would be the key resistance areas, while below 24,590/81,150 traders may prefer to exit their long positions,” he added.

Nifty Bank outlook
Nifty Bank formed a Morning Star candlestick pattern on the daily chart, indicating strength. The next key hurdle for the Bank Nifty is placed near the 56,000–56,100 zone, while major support is seen near 53,480, said Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates. “Traders are advised to hold long positions and consider booking profits around the 56,000-56,100 levels” he said.

Nifty Bank has also moved above all key moving averages, while the daily RSI at 65 is trending higher. The immediate resistance is placed at the all-time high of 56,098.70. A decisive breakout above this level could open further upside toward 56,500–56,600, said Om Mehra, Technical Research Analyst, SAMCO Securities

“The hourly MACD has turned positive, and a corresponding confirmation on the daily timeframe would strengthen the positive outlook. The support is placed at 55,000, followed by 54,750. The overall trend remains bullish, with any pullback likely to be a buy-on-dip opportunity,” he said.