Indian benchmark indices are likely to open lower on Wednesday amid the rising geopolitical tensions between Iran and Israel. Beside the concerns in the Middle East, US Federal Reserves monetary policy outcome shall also spill its impact on the traders’ sentiments. Domestic cues remained largely subdued.
Nifty futures on the NSE International Exchange traded 34.80 points, or 0.14 per cent, lower at 24,834, hinting at a muted start for the domestic market on Wednesday. Concerns over escalating hostilities in the Middle East stayed front and centre in markets on Wednesday. Shanghai and Hong Kong fell in the early trade, while KOSPI and Nikkei were up.
Possible US tariffs on pharma imports are likely to keep Indian pharma stocks under pressure, while defence stocks are expected to remain in focus amid escalating Israel-Iran tensions, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services. “Market direction will be guided by global cues, with volatility around key central bank announcements and geopolitical developments.”
US stocks finished with losses on Tuesday as the Israel-Iran conflict raged on for a fifth day and kept investor anxiety high. The Dow Jones Industrial Average fell 299.29 points, or 0.70 per cent, to 42,215.80, the S&P 500 lost 50.39 points, or 0.84 per cent, to 5,982.72 and the Nasdaq Composite dropped 180.12 points, or 0.91 per cent, to 19,521.09.
Investors rushed for the safety of US Treasuries and the dollar. The dollar firmed at a one-week high of 145.445 yen and held to most of its gains against other peers. US Treasury yields were steady in Asia after falling on Tuesday. The benchmark 10-year yield was last at 4.4027 per cent.
In commodities, Oil prices extended their climb on Wednesday, with Brent crude futures up 0.33 per cent to $76.70 per barrel while US crude rose 0.45 per cent to $75.18 a barrel. Both had jumped more than 4% in the previous session. Spot gold eased 0.12 per cent to $3,384.73 an ounce.
In the absence of any major domestic events, global cues- such as updates on ongoing geopolitical tensions and the outcome of the FOMC meeting-will guide the market trend and are likely to keep volatility elevated, said Ajit Mishra, SVP of Research at Religare Broking. “Amid this backdrop, participants should maintain a stock-specific trading approach while managing position sizes prudently.”
Provisional data available with NSE suggest that FPIs turned net buyers of domestic stocks to the tune of Rs 1,482.77 crore on Tuesday. On the other hand, domestic institutional investors (DIIs) remained buyers of Indian equities to the tune of Rs 8,207.19 crore on a net-net basis.
Markets are on edge as global geopolitics collide with policy signals. Gold may stay hot, IT could remain a safe bet—but sentiment hinges on upcoming Federal Reserve commentary and crude moves, said Vikram Kasat, Head of Advisory at PL Capital, with a caution to buckle up for volatility.
Nifty & Sensex outlook
The Nifty failed in its attempt to breach the crucial resistance level of 25,000, concluding the session on a weak note. Despite this intraday pressure, the Nifty remains in a consolidation phase positionally. Traders should keep a close eye on 24,700, likely to act as a key support level on the downside, said Nandish Shah, Senior Derivative & Technical Research Analyst at HDFC Securities.
A reversal formation on intraday charts and a bearish candle on daily charts indicate temporary weakness. As long as the market is trading below 24,900/81,800, the weak sentiment is likely to continue, said Shrikant Chouhan, Head of Equity Research at Kotak Securities.
“On the downside, 24,775/81,200 would be the immediate support zones for traders. Below this, the market could slip to 24,675-24,625/80,900-80,700. On the flip side, above 24,900/81,800, the sentiment could change. If it moves above this level, it could rally up to 25,000-25,100/82,100-82,500,” it said.
Nifty Bank outlook
Bank Nifty formed a bear candle on the daily chart signaling profit booking around 56,000 levels amid acceleration of the geopolitical tension in the middle east. Going ahead only a sustained close above the 56,000 mark could pave the way for further upside towards the 56,600 and 57,000 levels, said Bajaj Broking.
Nifty Bank continues to consolidate within a narrow band. It is hovering near its 20-day EMA and the midline of the Bollinger Band, signalling a zone of congestion with the decline trendline. MACD remains in negative crossover mode, reflecting the consolidation phase, said Om Mehra, Technical Research Analyst at SAMCO Securities.
“The support is seen at 55,350, and a breach below this zone may push the index toward 55,000. The resistance is capped near 56,100, followed by 56,200, where the upper Bollinger Band is placed. Nifty Bank may remain range-bound, with a slight bearish tilt unless it closes decisively above 56,100,” he said.
Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.