Indian equity benchmark indices are set to open on a muted note, modestly higher, on Friday amid mixed global cues after hitting new highs on Thursday. Traders’ morale is boosted by the rising expectations of the US Fed rate cut and RBI in the upcoming policy meets and possible truce between Russia and Ukraine.
Nifty futures on the NSE International Exchange traded 23.10 points, or 0.09 per cent, up at 26,414, hinting at a positive start for the domestic market on Friday. Asian shares are set to end a tough November on steadier ground, but were down on Friday. KOSPI was down a per cent, while Nikkei and Hang Seng were down marginally.
“The recent rally confirms the market’s entry into a new bull cycle. With both global and domestic interest rates expected to fall more sharply, we see a supportive liquidity environment, a bond rally and strengthening of rupee,” said Vikram Kasat, Head of Advisory at PL Capital. “Investors should position portfolios for a falling rate cycle adding duration in government bonds and increasing exposure to rate-sensitives.”
US markets were closed overnight for the Thanksgiving holiday and are due for a shortened session on Friday. European stocks traded mostly higher, while currencies were much more sedate. November this year proved to be unusually choppy for global equities.
The US dollar was heading for its worst weekly performance since late July on Friday as traders ramped up bets for further monetary easing from the Federal Reserve next month, while liquidity was thinned by the US Thanksgiving holiday. The dollar index was last trading up 0.1 per cent at 99.624.
Brent crude oil futures were little changed on Friday as investors eyed the progress of the Russia-Ukraine peace talks and the outcome of the OPEC+ meeting on Sunday for clues on potential changes in supply which has been weighing on prices. Brent crude futures were unchanged at $63.34 a barrel, while US West Texas Intermediate crude was at $59.00 a barrel, up 0.60 per cent.
A recovery in broader markets, along with supportive global cues and steady domestic sentiment, could drive the next leg of the rally, said Ajit Mishra, SVP of Research at Religare Broking. “We expect the positive momentum to continue, Traders should maintain a ‘buy-on-dips’ approach, focusing on sectoral rotation and strong stock-specific setups,” he adds.
Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 1,255.20 crore on Thursday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 3,940.87 crore on a net-net basis.
Nifty50 & Sensex outlook
“We believe that 26,100/85,500 and 26,000/85,200 remain strong support levels for the bulls. As long as the market trades above these levels, the bullish sentiment is likely to continue,” said Shrikant Chouhan, Head of Equity Research at Kotak Securities.
On the higher side, 26,350-26,400/86,000-86,300 would act as key resistance areas for the bulls. However, below 26,000/85,200, the sentiment could change. Below these levels, traders may prefer to exit their long positions, Chauhan said.
Traders are advised to maintain a ‘buy-on-dips approach’ and avoid contra short trades. 26,100–26,000 remains the immediate support zone, while a stronger base has now shifted toward 25850, said Rajesh Bhosale, Equity Technical Analyst, Angel One. On the upside, 26,300 appears imminent, while a reciprocal retracement projection places 26,500 as the next potential upside target.”
Nifty Bank outlook
Nifty Bank marked a fresh all-time high on Thursday. Considering the current chart structure, the index is likely to continue its northward journey and test the 60,100, followed by 60,500 in the short term, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities. “While on the downside, the zone of 59,400-59,300 will act as important support,” he adds.
Nifty Bank formed a small bullish candlestick pattern with a higher high and a higher low signaling continuation of the positive momentum, said Bajaj Broking. “We expect the index to retain its positive momentum and move towards the 60,400 level. A move above it will open further upside towards 61,000 in the coming weeks. Meanwhile, the 58,800-58,600 is likely to act as a crucial support.”
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