Indian benchmark indices are likely to open on a muted note on Monday, tracking the weakness in the Asian markets, while US stock futures were trading lower in the early trade. However, a weak US dollar may support the sentiments back home, while traders will be keenly looking at India Inc’s earnings kicking-off later this week.
Nifty futures on the NSE International Exchange traded 39.10 points, or 0.15 per cent, lower at 25,501, hinting at a negative start for the domestic market on Monday. Stock markets slipped in Asia amid much confusion over US tariffs. Nikkei and KOSPI were down half a per cent each, while Hang Seng was marginally down.
Indian equities witnessed a phase of profit booking this week, following a sharp rally in recent sessions. Mixed global cues and the impending US tariff deadline have prompted investors to adopt a wait-and-watch approach, said Vinod Nair, Head of Research, Geojit Investments Limited.
Wall Street observed a holiday on Friday on the account of Independence Day. In the coming week, Investors will be keeping a close eye on tariff headlines out of Washington next week, as a temporary suspension of punitive import levies is set to expire.
Safe-haven bonds were a better bid, with 10-year Treasury yields down almost 2 basis points at 4.326 per cent. Major currencies were little changed as the dollar index continued to languish near four-year lows at 96.913. The dollar has been undermined by investor concerns about Trump’s often chaotic tariff policy.
In commodity markets, gold slipped 0.3 per cent to $3,324 an ounce, though it did gain almost 2 per cent last week as the dollar fell. Brent dropped 52 cents to $67.78 a barrel, while US crude fell $1.01 to $65.99 per barrel. Oil prices slid anew after the Organization of the Petroleum Exporting Countries and their allies.
The coming week holds significant importance not only for Indian markets but for global equities as well. The most anticipated event is the outcome of the US trade deadline on July 9, which could shape global trade dynamics, said Ajit Mishra, SVP of Research at Religare Broking. “Investors will closely monitor the release of the US Federal Reserve’s FOMC minutes on the same day.”
Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 1,028.84 crore on Friday. On the other hand, domestic institutional investors (DIIs) turned sellers of Indian equities to the tune of Rs 760.11 crore on a net-net basis. FPIs pulled out Rs 1,421 crore from the Indian Equities in July so far.
Despite the negative undertone, global economic indicators remained supportive, with better-than-expected US ISM manufacturing data and a strong non-farm payrolls report signaling resilience in the world’s largest economy, said Puneet Singhania, Director at Master Trust Group.
Nifty & Sensex outlook
For the bulls, 25,500/83,600 would act as an immediate resistance zone. If the market succeeds in trading above this level, it could move up to 25,670/84,100, said Amol Athawale, VP of Technical Research at Kotak Securities. “A successful breakout above this could push the market towards 25,800–25,900/85,000-85,300. On the flip side, if the market falls below 25,300/8,3000, sentiment could turn negative, Below this level, the market could slip to 25,000–24,950/82,100-81,900.”
Nifty has resumed its upward trajectory after breaking out of its recent consolidation range. The index is in Wave 5 of an Elliott Impulse structure on the weekly chart, indicating a continuation of the bullish trend, said Choice Broking. “The next major upside targets are seen at 27,300 and 28,600. On the downside, key supports are placed at 25,000 and 24,500,” it added.
Nifty Bank outlook
Bank Nifty on the weekly chart has formed a small bear candle with a higher high and higher low signaling consolidation after the recent strong up move. Key support is placed at 56,000–55,500 regions, Bajaj Broking said. “We expect the index to enter consolidation in the range 56,000-57,500 in the coming sessions. Only a move above 57,500 will open further upside towards 58,500 levels.”
The Bank Nifty is showing strength by holding above the 57,000 zone, with today’s candle forming a mild recovery after a few profit-booking sessions, suggesting bulls are still defending higher levels, said Vikas Jain, Head of Research at Reliance Securities. The 20-day SMA is sloping upward and providing dynamic support near 56,500, which is a key level to watch if the index dips, he said.
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