Stock market today: Gift Nifty up 24 pts; key levels to watch for Nifty, Sensex & Nifty Bank

Indian benchmark indices are set to open on a muted note on Wednesday amid mixed global cues. US stocks fell overnight, while Asian stocks firmed at open. However, the debt profile of the world's largest economy along with the India-US trade deal shall be major cues to guide the Dalal Street in near term.

Nifty futures on the NSE International Exchange traded 23.90 points, or 0.10 per cent, lower at 24,798.50, hinting at a muted start for the domestic market on Wednesday. Asian stocks opened mostly higher on Wednesday. Nikkei was the sole loser with a 0.15 per cent cut. ASX200, Shanghai Composite, Hang Seng and KOSPI gained 0.5-0.75 per cent range.

Investors are closely tracking the ongoing India and US talks for a trade agreement, which is likely to happen in three stages. As per reports, an interim agreement is expected before July when the pause in US reciprocal tariffs is set to end, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services. "We expect markets to remain range bound," he said.

US stocks fell on Tuesday, under pressure from rising Treasury yields, with the US sovereign debt profile in focus. The Dow Jones Industrial Average fell 114.83 points, or 0.27 per cent, to 42,677.24, the S&P 500 lost 23.14 points, or 0.39 per cent, to 5,940.46 and the Nasdaq Composite shed 72.75 points, or 0.38 per cent, to 19,142.71.

Oil prices jumped more than 1 per cent on Wednesday after reports Israel is preparing a strike on Iranian nuclear facilities, raising fears that a conflict could upset supply availability in the key Middle East producing region. Brent futures for July rose 1.32 per cent to $66.24 a barrel. US West Texas Intermediate crude futures for July climbed 1.45 per cent to $62.93.

The US dollar edged lower on Wednesday, extending a two-day slide against major peers, as President Donald Trump failed to convince Republican holdouts to back his sweeping tax bill. The dollar index edged down 0.03 per cent to 99.938. Spot gold jumped 2 per cent to $3,296.55 per ounce.

The recent decline reflects rising caution among market participants in the absence of any major domestic triggers and amid global uncertainties, said Ajit Mishra, SVP of Research at Religare Broking. Volatility in the US markets and concerns over the potential impact of the US-China trade deal on foreign institutional inflows into emerging markets also weighed on sentiment, he said.

"We believe investors should not overreact to the recent dip and instead wait for clearer signals. In the meantime, we advise traders to avoid aggressive long positions and focus on sectors or themes that are showing relative strength," Mishra added.

Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 10,016.10 crore on Tuesday. On the other hand, domestic institutional investors (DIIs) turned sellers of Indian equities to the tune of Rs 6,738.39 crore on a net-net basis.
 

Nifty & Sensex outlook

The short-term trend remains strong, although there is a possibility of a deeper pullback toward the 21-day EMA on the daily timeframe. The negative divergence on the daily RSI has added to the bearish sentiment, said Rupak De, Senior Technical Analyst at LKP Securities.

"If Nifty sustains below 24,700, the correction could extend further, potentially towards 24,300. However, if the index moves back above 24,700, it may signal a return to a consolidation phase," he said.

Shrikant Chouhan, Head Equity Research at Kotak Securities believes that as long as the market is trading below 24,850/81,700 the correction wave is likely to continue. On the down side market could retest the level of 24,550-24,500/80,800-80,500. On the higher side above 24,850/81,700 the sentiment could change, he said.
 

Nifty Bank outlook

Technically, Nifty Bank confirmed the shooting star candlestick pattern by sustaining below 55,290 and registered a low of 54,829 level, as expected, asid Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates.

"As long as Bank Nifty remains below 55,290, further weakness is likely. On the downside, strong support is seen near 54,460, where the 21-DEMA is placed. Traders are advised to follow a sell-on-rise strategy in Bank Nifty as long as it stays below 55,290," he added.

"Nifty Bank has been trading within a downward-sloping channel for the last 19 sessions. We expect it to extend the last 4 weeks’ consolidation in the range of 53,500-56,000. Within the consolidation we believe dips should be used as buying opportunity. Key support at 53,000-53,500 being the confluence of key retracement and 50 days EMA," said Bajaj Broking Research.