Stock market today: Gift Nifty down 14 pts; key levels to watch ahead of RBI policy

Indian benchmark indices are set to open on a muted note on Friday ahead of RBI’s monetary policy later today. The central bank is expected to cut interest rates, while Dalal Street will also be looking at its commentary. On the global front, the loggerheads between Elon Musk and Donald Trump shall also guide the direction in the near term.

Nifty futures on the NSE International Exchange traded 13.90 points, or 0.06 per cent, lower at 24,847.50, hinting at a flat start for the domestic market on Friday. Asian equities opened cautiously on Friday. KOSPI rose more than a per cent, while Nikkei added half a per cent. Hang Seng and Shanghai were seen in red.

There will be continued focus on other rate-sensitive sectors as well. Easing of 10 year US bond yield is a near-term positive for emerging markets, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services. “We expect markets to consolidate with a positive bias, tracking global markets, macro-economic indicators and progress in US-India trade negotiation.”

Wall Street stocks indexes ended lower on Thursday in choppy trade amid the Trump-Musk feud. The Dow Jones Industrial Average fell 108 points, or 0.25 per cent, to end at 42,319.74. The S&P 500 lost 31.51 points, or 0.53 per cent, at 5,939.30 and the Nasdaq Composite dropped 162.04 points, or 0.83 per cent, to 19,298.45.

In commodities markets, oil prices were slightly lower but were headed for weekly gains on supply concerns. US crude futures slipped 0.1 per cent to $65.29 a barrel but was up 2.1 per cent for the week. In precious metals, gold prices climbed 0.3 per cent to $3,362 an ounce. For the week, they are up 2.2 per cent.

The dollar was headed for a weekly loss on Friday, undermined by signs of fragility in the US economy and as trade negotiations between Washington and its trading partners made little progress despite a looming deadline. The dollar was little changed at 98.72 after having hit a six-week low on Thursday.

All eyes are on the outcome of the upcoming MPC meeting, the continued outperformance of rate-sensitive sectors such as banking, realty, and auto appears to be factoring in a 25 bps rate cut, said Ajit Mishra, SVP of Research at Religare Broking. “RBI’s commentary will be crucial. We continue to recommend a focus on theme-specific opportunities while maintaining prudent position sizing due to the mixed market signals,” he said.

Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 2,382.40 crore on Thursday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 208.47 crore on a net-net basis.

The spike in uncertainty will keep the market within the present range for the near-term, said VK Vijayakumar, Chief Investment Strategist, Geojit Investments. “Buy on dips continues to be the ideal strategy now. Rate sensitives will be preferred in view of the expected rate cut by the MPC.”
 

Nifty & Sensex outlook

Nifty50 has regained its level above the 20-day EMA, indicating a potential strengthening of the underlying trend. The index appears to have established a strong base near 24,500. On the upside, 24,900 could offer short-term resistance for the index, as investors also looked ahead to RBI’s monetary policy decision, said Devarsh Vakil, Head of Prime Research, HDFC Securities.

The market has formed a reversal formation and is currently trading near the 20-day SMA on the daily charts, said Shrikant Chouhan, Head of Equity Research at Kotak Securities. “We believe that 24,600/81,000 would act as a key support zone for traders. As long as the market is trading above this level, the bullish sentiment is likely to continue,” he said.

“On the higher side, the market could move up to 24,900-25,000/82,000-82,200. However, a breakdown below 24,600/81,000 could change the sentiment. Below this level, the market could retest the levels of 24,500–24,450/80,700-80,500,” Chauhan added.
 

Nifty Bank outlook

Bajaj Broking believes a closing above the 56,000 area will signal extension of the up move towards the 56,700 zone in the near term. Failure to do so will signal extension of the last five weeks’ consolidation. The short-term structure remains constructive with immediate support placed at 55,000–55,200 levels, while key short-term support is seen at 54,000–53,500, it said.

Nifty Bank remains mildly bullish, holding above its short-term moving average, but price action continues to lack momentum, with buyers hesitating to chase highs ahead of the RBI policy outcome, said Dhupesh Dhameja, Derivatives Research Analyst at SAMCO Securities. “Traders are advised to stay nimble, as any policy-induced surprises could tilt the balance sharply in either direction,” he said.