Indian benchmark indices are likely to open with mild gains on Tuesday amid some positive global cues including hopes over tariff talks. Global economic data shall drive the sentiments for equities in the coming sessions. Traders shall be keenly awaiting India’s RBI policy due later this week.
Nifty futures on the NSE International Exchange traded 27.20 points, or 0.11 per cent, higher at 24,853.50, hinting at a flat start for the domestic market on Tuesday. Asian shares were off to a tepid start at the open Tuesday. Hang Seng gained 1.25 per cent, while Nikkei added half a per cent for the day. KOSPI and Shanghai were also up in early trade
The Indian market is expected to continue its consolidation amid weak global cues, although downside may be limited due to strong domestic macros and a potential boost from the anticipated RBI rate cut, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services.
US stocks settled higher on Monday amid optimism over trade talks. The Dow Jones Industrial Average rose 35.41 points, or 0.08 per cent, to 42,305.48; the S&P 500 gained 24.25 points, or 0.41 per cent, to 5,935.94; and the Nasdaq Composite gained 128.85 points, or 0.67 per cent, to 19,242.61.
The dollar fell to a six-week low on Tuesday on signs of fragility in the US economy because of damage from the trade war President Donald Trump’s administration is waging. The dollar index was little changed after touching 98.58. Spot Gold surged 2.5 per cent to Rs $3,372.64 per ounce.
Oil prices rose in early Asia trade on Tuesday on concerns about supply. Brent crude futures gained 55 cents, or 0.85 per cent, to $65.18 a barrel. US West Texas Intermediate crude was up 59 cents, or 0.94 per cent, to $63.11 a barrel. Rate sensitive Bitcoin was up by a per cent to $106,500.
While domestic cues remain favorable, global uncertainty continues to keep participants on edge, delaying the next directional move in the index, said Ajit Mishra, SVP of Research at Religare Broking. “Buoyancy in select themes and the broader market is offering ample trading opportunities, so participants should remain focused accordingly,” he said.
Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 2,589.47 crore on Monday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 5,313.76 crore on a net-net basis.
Nifty and Sensex outlook
Nifty managed to close above its 20-day EMA, showing some buying interest at lower levels. Immediate support is placed at 23,630 where its 20 days EMA is placed, while positional support lies at 24,500–24,550, said Vatsal Bhuva, Technical Analyst at LKP Securities. “Resistance levels are marked at 24,860 and 25,070. The trend remains sideways with a slight negative bias,” he said.
Shrikant Chouhan, Head Equity Research at Kotak Securities said that the current market texture is non directional. Hence, level-based trading would be the ideal strategy for day traders. 24,650/81,100 and the 20-day SMA or 24,700/81,300 would act as key support levels.
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities said that the underlying trend of Nifty remains choppy with weak bias. “The Nifty is expected to show a short-term upside bounce towards 24,900 in the next few sessions. Immediate support is at 24,500,” he said.
Nifty Bank outlook
Bias of Nifty Bank remain positive dips should be used as a buying opportunity with immediate support placed at 55,000-55,200 levels while the key short-term support is seen at 54,000-53,500 being the confluence of key retracement and 50 days EMA and the lower band of the last 5 weeks consolidation range, said Bajaj Broking.
Nifty Bank formed a green candle on the daily charts, indicating bullish undertone, said Hrishikesh Yedve, AVP Technical and Derivative Research, Asit C. Mehta Investment Interrmediates. “On the downside, the 21-DEMA placed near 55,060, will act as strong support. As long as the index holds above this level, a ‘buy on dips’ strategy is advisable for Bank Nifty,” he said.
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