Stock market today: Gift Nifty up 98 pts; key levels to watch for Nifty, Sensex & Nifty Bank

Indian benchmark indices are set to open higher on Tuesday on the back of a rally in the global markets. A positive ending for the US stocks, along with eased down dollar and crude oil prices are supporting the market sentiments. A consistent buying by FIIs and positive Q4 earnings are also supporting the sentiments.

Nifty futures on the NSE International Exchange traded 97.60 points, or 0.39 per cent, lower at 25,074, hinting at a positive start for the domestic market on Tuesday. Asian stocks rose on Tuesday. Hong Kong was up one per cent, while Japanese and Australian markets added half a per cent each. South Korea was seen marginally up.

The domestic market witnessed consolidation, amid Moody’s downgrade of the US sovereign credit rating and slower retail sales growth in China, said Vinod Nair, Head of Research at Geojit Investments. However, the broader market outperformed. Despite the profit booking, sustained FII inflows, underpinned by favorable macroeconomic conditions, he said.

US stocks finished near the unchanged mark on Monday with market sentiment weakened by the downgrade of the federal government's perfect sovereign credit rating owing to its huge debt profile. Dow Jones rose 0.32 per cent to 42,792.07, the S&P 500 gained 0.09 per cent to 5,963.60 and the Nasdaq Composite added 0.02 per cent to 19,215.46.

Oil prices edged up on Tuesday on a potential breakdown in talks between the US and Iran over Tehran's nuclear program and the weakened prospects of more Iranian oil supplies entering the global market. Brent futures rose 12 cents to $65.66 a barrel, while US West Texas Intermediate crude futures climbed 16 cents to $62.85.

The dollar traded sideways on Tuesday after having gilded lower for a week, hemmed in by the Fed's caution over the economy and as US lawmakers came closer to passing a bill expected to widen the nation's fiscal deficit. The dollar index rose 0.1 per cent, while its down 10.6 per cent from its January highs.

Ajit Mishra, SVP of Research at Religare Broking believes that this intermediate pause in the index, without any significant damage to the overall structure, is a healthy sign. During such phases, traders should adopt a stock-specific approach. Banking now merits more attention following its recent consolidation phase, as it could lead the next leg of the rally, he said.

Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 525.95 crore on Monday. On the other hand, domestic institutional investors (DIIs) turned sellers of Indian equities to the tune of Rs 237.93 crore on a net-net basis.

Nifty & Sensex outlook
Nifty is placed above all key moving averages, which indicates continuation of an uptrend. Immediate support for the Nifty is seen in the band of 24,750-24,800, while positional stands at 24,500. On the upside, resistance is placed at 25,116 and 25,207, said Nandish Shah, Senior Derivative & Technical Research Analyst, HDFC Securities.

Nifty has formed a small bearish candle, which indicates temporary weakness, said Shrikant Chouhan, Head of Equity Research at Kotak Securities. 25,000/82,200 would act as a trend decider level for day traders. Below this, we could see an intraday correction down to 24,850-24,800/81,700-81,500. A breach of 25,000/82,200 could change the sentiment.

Nifty Bank
Nifty Bank is poised near the upper boundary of this falling channel, suggesting a potential breakout that would reinforce the bullish momentum, said Bajaj Broking. "On the downside, immediate support is placed at 54,800. The zone of 54,400–54,100, which aligns with the prior week's low and the 20-day EMA, is expected to act as a strong support base in the near term," it said.

Nifty Bank has formed a shooting star candlestick pattern on a daily scale, which requires confirmation. A sustained move below 55,290 could trigger profit booking in Bank Nifty, which could drag the index towards 55,000–54,800 levels, said Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates.

"On the flip side, a firm break above 55,700 could push the index towards 56,000–56,100 levels. Traders should closely monitor these levels for potential trading opportunities," he said.