Indian Stock Market Braces for Lower Opening Amid Global Headwinds
The Indian stock market is poised for a negative start on Friday, with benchmark indices Sensex and Nifty 50 likely to open lower, mirroring weakness in global markets. This downward pressure is primarily driven by sustained selling in US technology stocks, which has cast a shadow over international investor sentiment.
Global Cues and Gift Nifty Signal Caution
The trends on Gift Nifty, which trades on the Singapore Exchange, further reinforce the expectation of a subdued opening for Indian equities. As of the latest indications, the Gift Nifty was trading around the 25,609 level, representing a significant discount of nearly 115 points compared to the previous close of Nifty futures. This gap highlights the cautious stance among market participants ahead of key domestic developments.
RBI Monetary Policy Announcement Looms Large
All eyes are on the Reserve Bank of India (RBI) today as its Monetary Policy Committee (MPC) prepares to announce the February monetary policy. This marks the final policy review for the financial year 2025-26. The committee, led by RBI Governor Sanjay Malhotra, is widely anticipated to maintain the status quo, keeping the repo rate steady at 5.25%. Market analysts will scrutinize the policy statement for any hints regarding future rate trajectories and economic outlook.
Recap of Thursday's Market Performance
On Thursday, the Indian equity market witnessed a decline, with the benchmark Nifty 50 closing below the psychologically significant 25,700 level. The Sensex dropped 503.76 points, or 0.60%, to settle at 83,313.93. Similarly, the Nifty 50 ended 133.20 points, or 0.52%, lower at 25,642.80, reflecting broad-based selling pressure.
Technical Outlook and Predictions for Key Indices
Sensex Prediction: Bearish Signals with Key Levels
From a technical perspective, the Sensex formed a bearish candle on the daily chart, suggesting potential further weakness from current levels. Shrikant Chouhan, Head of Equity Research at Kotak Securities, provided detailed analysis: "We are of the view that the intraday market texture is weak, but a fresh selloff is possible only if the 83,200 level is broken below. In such a scenario, the Sensex could potentially slip to the 83,000 - 82,500 range. Conversely, 83,800 would act as an immediate resistance zone. A move above this level could propel the index toward 84,000 - 84,200."
Nifty 50 Analysis: Range-Bound with Cautious Optimism
Derivatives data for Nifty shows heavy put writing at the 25,500 strike and significant call writing at the 25,700 strike, indicating a clearly defined narrow trading range in the near term. Aakash Shah, Technical Research Analyst at Choice Equity Broking, commented: "Despite the marginally negative close, the Nifty 50 index remains range-bound. This structure supports a cautiously positive near-term outlook, with a strategy of buying on dips as long as the key support zone holds firm."
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, noted that Nifty 50 formed a reasonable negative candle with a minor lower shadow. He elaborated: "Technically, the market action of the last couple of sessions signals a broad range movement between 25,600 and 25,800 levels. The substantial opening upside gap from Tuesday has been partially filled after three sessions. If this gap remains partially filled for the next couple of sessions, it could be interpreted as a bullish runaway gap, typically formed during an uptrend. Therefore, a sustainable move above 25,800 is likely to unlock more upside potential in the near term."
Ajit Mishra, SVP of Research at Religare Broking Ltd, maintains a positive stance on Nifty 50, advocating for a buy-on-dips approach as long as the index holds above the 25,400 level. He sees upside potential toward 26,000 initially, followed by a move toward fresh record highs.
Bank Nifty Outlook: Support and Resistance Zones Identified
The Bank Nifty index ended 174.50 points, or 0.29%, lower at 60,063.65 on Thursday, forming a small body candle with a minor lower shadow on the daily chart. Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, outlined key levels: "Looking ahead, the 59,600 – 59,500 zone will act as a crucial support area for the Bank Nifty index. On the upside, the region between 60,300 – 60,400 remains the immediate resistance. A breakout above this band may revive upward momentum."
Om Mehra, Technical Research Analyst at SAMCO Securities, provided additional insights: "The Bank Nifty index holds above the 20-day and 50-day moving averages, with the 50-day average near 59,450 offering a strong base. However, it remains capped below the upper Bollinger Band and a falling trendline, which acts as an immediate hurdle. The index is moving sideways following a sharp recovery from recent lows. The Relative Strength Index (RSI) is near 56, above the neutral zone, while the Moving Average Convergence Divergence (MACD) continues to improve in positive territory. On the downside, 59,800 is the immediate support, followed by 59,600, coinciding with the 50-day moving average. Resistance lies at 60,300 – 60,350, followed by 60,500. The Bank Nifty remains close to its record zone but is currently in a pause phase after the recent sharp move."
Disclaimer: The views and recommendations expressed above are those of individual analysts or broking companies and do not represent the stance of Mint. Investors are advised to consult with certified experts before making any investment decisions.
