Indian benchmark indices are set to open lower on Monday despite a positive opening for Asian stocks. Revised GST implication will be offset by the revised charges on H1-B visas by the US. Traders will be looking at the developments around trade deal between the US and India.
Nifty futures on the NSE International Exchange traded 83.70 points, or 0.33 per cent, down at 25,327.50, hinting at a negative start for the domestic market on Monday. Asian stocks marched up on Monday after the Federal Reserve’s rate cut last week. Nikkei jumped 1.5 per cent, while KOSPI was up 0.75 per cent. Hang Seng dropped 0.8 per cent.
As India heads into the festive season, all eyes are on how markets digest recent GST rate cuts, evolving consumer demand trends, and the steady stream of IPOs that have kept primary market activity resilient despite global volatility, said Vikram Kasat, Head of Advisory at PL Capital.
On Wall Street, all three indexes closed at record highs. The Dow Jones Industrial Average rose 0.37 per cent to 46,315.27, the S&P 500 advanced 0.49 per cent to 6,664.36, and the Nasdaq Composite firmed 0.72 per cent to 22,631.48. All three also hit record highs the day before.
In commodities, oil prices inched higher in early trading, with Brent crude futures 0.3 per cent higher at $66.89 a barrel. US West Texas Intermediate futures rose 0.35 per cent to $62.9. Gold prices climbed 0.24 per cent to $3,692.79 per ounce, just shy of the record high touched last week.
The dollar was steady on Monday as traders looked ahead to a slew of speeches from Federal Reserve officials. The dollar index was at 97.716. In Asia, China on Monday kept benchmark lending rates unchanged for the fourth consecutive month in September, in line with market expectations.
Investors should focus on resilient, domestic-facing sectors, maintain exposure selectively, and avoid aggressive long positions until clearer directional signals emerge, said Ajit Mishra, SVP of Research at Religare Broking. “Traders should closely track foreign fund flows and monitor resistance levels, as leadership from the banking space will be critical to sustaining the ongoing uptrend.”
Provisional data available with NSE suggest that FPIs turned net buyers of domestic stocks to the tune of Rs 390.74 crore on Friday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 2,105.22 crore on a net-net basis. FPIs have withdrawn Rs 7,945 crore from Indian equities in September so far.
FIIs have been buying through the primary market even while selling through the exchanges. Overvaluation of Indian stocks is the principal reason for this dualistic behaviour of FIIs. VK Vijayakumar, Chief Investment Strategist at Geojit Investments. “FII selling in India and buying in other markets has been profitable for FIIs, so far, this year. This scenario may change, going forward,” he said.
Nifty & Sensex outlook
The short-term outlook remains bullish, but due to temporary overbought conditions, range-bound activity may occur in the near future. Buying on dips and selling on rallies would be the ideal strategy for traders, said Amol Athawale, VP of Technical Research at Kotak Securities.
“The key support zones are around 25,200/82,300 and 25,150-25,100/82,100-81,900, while resistance levels are at 25,450-25,500/83,200-83,400 and 25,600/83,700. Below 25,100/81,900, the uptrend could become vulnerable,” he added.
As long as the index remains above these moving averages, market sentiment is expected to stay constructive. On the upside, immediate resistance levels are seen at 25,500, followed by 25,600 and 25,850. On the downside, support is placed at 25,150 and then at 25,000, with a deeper breakdown below 24,900 likely to trigger additional downside pressure, said Choice Broking.
“Given the current structure, a ‘buy on dips’ strategy remains favorable, though traders are advised to maintain a disciplined approach with strict stop-loss measures, particularly considering the prevailing market volatility,” it added.
Nifty Bank outlook
Nifty Bank may maintain positive bias and head higher towards 56,000-56,150 levels in the coming sessions. A follow through strength above 56,150 will open upside towards the 57,000 levels in the coming weeks, said Bajaj Broking. “On the downside, immediate support is placed at 54,800 levels being the 20- and 100-days EMA,” he said.
The 20-day EMA zone between 55,000-54,900 level is expected to act as a key support area. Holding above this zone will be crucial for maintaining the bullish bias, said Sudeep Shah, Head of Technical Research and Derivatives at SBI Securities.
“On the upside, the 55,900–56,000 zone will serve as an important resistance, as it coincides with the 61.8 per cent Fibonacci retracement level of the prior decline from 57,628 to 53,561. A sustained breakout above 56,000 could trigger a fresh rally, with potential upside targets around 56,800, followed by 57,500 in the short term,” he added.
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.