Indian benchmark indices are set to open on a flat note on Thursday amid the weekly expiry of F&O contracts, ahead of RBI’s monetary policy due tomorrow. Mixed global cues from the overseas market is set to keep the sentiments cautious. However, rate cut cues and FPI sentiment shall guide the market in near term.
Nifty futures on the NSE International Exchange traded 4.10 points, or 0.02 per cent, higher at 24,733.50, hinting at a flat start for the domestic market on Thursday. Asian shares opened cautiously after being weak on Thursday. KOSPI soared nearly 2 per cent, while Hang Seng was up by a per cent. However, Japan’s Nikkei was down one-third a per cent.
With the monetary policy meeting beginning, investors will be closely tracking RBI’s interest rate decision on Friday. Rate-sensitive sectors including PSU Banks, Realty and Auto will be in focus, driven by expectation of a third rate cut in 2025 and measures to further boost liquidity, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services.
“We expect the market to remain in consolidation mode, tracking global markets and macro-economic cues; while stock-specific action would continue on the back of sectoral developments,” he said.
US stocks ended mixed on Wednesday as weak data revealed the economic toll taken by President Donald Trump’s trade policies. The Dow Jones Industrial Average fell 0.22 per cent to 42,427.74; the S&P 500 gained 0.01 per cent to 5,970.81; and the Nasdaq Composite rose 0.32 per cent to 19,460.49.
The dollar softened on Thursday, stuck near six-week lows after weak US economic data revived fears of slow growth and high inflation, while the euro was steady ahead of an expected interest rate cut from the European Central Bank. The dollar index was at 98.749 and has dropped about 9 per cent this year, poised for its weakest yearly performance since 2017.
Oil prices slipped in early trade on Thursday after a build in U.S. gasoline and diesel inventories and Saudi Arabia’s cut to its July prices for Asian crude buyers. Brent crude futures fell 21 cents, or 0.3 per cent, to $64.65 a barrel, while US West Texas Intermediate crude lost 29 cents, or 0.5 per cent, dropping to $62.58.
Participants are advised not to read too much into this move and should maintain a cautious stance ahead of the weekly expiry on Thursday, said Ajit Mishra, SVP of Research at Religare Broking. “Additionally, focus should remain on a stock-specific trading approach, given the rotational buying observed across various themes,” it added.
Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 2,566.82 crore on Wednesday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 1,076.18 crore on a net-net basis.
Nifty & Sensex outlook
Nifty50 formed a bearish crossover in the momentum oscillator RSI signals weakening price momentum, suggesting limited movement in the near term, said Rupak De, Senior Technical Analyst at LKP Securities. “Immediate support is placed at 24,500; a break below this level could lead to further weakness. On the higher side, resistance is seen at 24,750/24,900,” he said
Shrikant Chouhan, Head of Equity Research at Kotak Securities believes that the current market structure is non-directional, and the intraday formation indicating range-bound activity is likely to continue in the near future.
“For traders, the key levels to watch are 24,450/80500 and 24,700/81,300. A move above the 20-day SMA or 24,700/81,300 could see the market rallying toward 24,760–24,850/81,500-81,800. Conversely, a dismissal of 24,450/80,500 could accelerate selling pressure, with the market potentially slipping to 24,320–24,300/80,100-80,000,” he said.
Nifty Bank outlook
Bajaj Broking believes only 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 formed a green candle on the daily charts, indicating bullish undertone. On the upside, immediate resistance is seen near the 56,100, and a firm breakout above this level could extend gains towards 57,000–57,500, said Hrishikesh Yedve, AVP Technical and Derivative Research, Asit C. Mehta Investment Interrmediates. “A ‘buy on dips’ strategy is advisable for Bank Nifty.”
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