Indian stock markets are set to kick-off the week with weakness on Monday on the back of rising crude oil prices and firm US dollar, which may add to the weakness of the Indian rupee and FIIs outflows. The ceasefire talks between the US-Iran were deadlocked, leaving the vital Strait of Hormuz ‌all but shut.
 

GIFT Nifty, Asian markets & US stocks

GIFT Nifty Futures or Nifty futures on the NSE International Exchange were 167.10 points, or 0.69 per cent, down at 24,067.50, hinting at a positive start for the domestic market on Monday. Asian stocks were mostly lower in the early trade. KOSPI rose sharply higher, while Nikkei and Hang Seng shed up to half a per cent.

The S&P 500 and the Nasdaq notched record highs on Friday, boosted by gains in Nvidia, Sandisk and other AI-related stocks. The S&P 500 climbed 0.84 per cent to end the session at 7,398.93 points. The Nasdaq gained 1.71 per cent to 26,247.08 points, while the Dow Jones ​Industrial Average rose 0.02 per cent to 49,609.16 points.
 

Crude, US dollar, gold & more

The dollar advanced against its major peers in early Asia trade on Monday ​the US-Iran ceasefire hung by a thread, boosting demand for the safe-haven ‌currency. The dollar index was trading at 98.001. Oil prices jumped $3 a barrel on Monday as the United States and Iran failed to agree to a peace ​proposal. Brent crude futures climbed ⁠3.14 per cent to $104.47 a barrel. while US West Texas Intermediate was at $98.51 a barrel, up 3.24 per cent.

Given the prevailing mix of supportive domestic fundamentals and elevated global uncertainty, investors should maintain a balanced and selective approach toward the market. Portfolio allocation may continue to favour fundamentally strong large-cap companies with healthy earnings visibility, said Ajit Mishra, SVP of Research at Religare Broking.

"Traders should maintain disciplined risk-management practices and avoid excessive leverage, particularly amid elevated geopolitical sensitivity and currency volatility. With broader markets significantly outperforming, stock selection and prudent position management will remain critical in navigating the current market environment," he said.
 

FII-DII flows

Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 4,110.60 crore on Friday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 6,748.13 crore on a net-net basis.

A significant trend in FPI flows this year is that Japan, South Korea and Taiwan are attracting significant inflows while India and some other emerging markets which are facing headwinds from the energy crisis and currency depreciation are facing outflows, said Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments.

Institutional activity is expected to be largely driven by global developments. In particular, the progress or deterioration of US–Iran negotiations will remain a key factor to monitor, given its significant implications for geopolitical stability and the potential impact on crude oil price volatility, said Bajaj Broking.
 

Nifty50 & Sensex outlook

The market experienced range-bound activity. It found support near 24,000/76,500 on the downside, while the profit booking was seen near the 24,400/78000 resistance mark on the upside. Technically, For Nifty on the lower side, 24,000 or the 50-day SMA and for Sensex 76500 would act as a crucial support zone for traders, Amol Athawale, VP of Technical Research at Kotak Securities.

"On the higher side, 24,400/78,000 would be the immediate resistance zone. A successful breakout above 24,400/78,000 could push the market up to 24,500-24,700/78,300-789,00. If the market falls below 24,000/76,500, selling pressure is likely to accelerate. Below this level, the market could retest 23,800/75,900, with downside potentially dragging it to 23,650-23,600/75,400-75,200," it adds.

Sensex is trading in a broader consolidation structure, with momentum indicators showing signs of short-term weakness, said Aakash Shah, Research Analyst, Choice Equity Broking. "Immediate support is placed near 76,800–76,700, while stronger support is seen around 76,500. On the upside, resistance is positioned near 77,800–78,000, and only a decisive breakout above this zone may revive bullish momentum in the near term."

The markets remained under pressure for the second consecutive session, with the Nifty forming a small-bodied bearish candle on the daily chart. However, the index managed to hold above its 21-DMA support placed near 24,140 levels on a closing basis, said Nilesh Jain, VP- Head of Technical and Derivative research at Centrum Finverse.

"Momentum indicators and oscillators are showing signs of improvement, with the RSI hovering around 46 levels. The broader structure continues to remain sideways to positive, and a gradual recovery towards 24,300–24,500 levels is likely in the near term, while the crucial support of the 50-DMA is placed around 24,000 levels," he said.
 

Nifty Bank outlook

Nifty Bank traded within a descending triangle-like formation on the intraday charts before witnessing a breakdown, leading to a sharp decline. It has formed a sizable bearish candle on the daily chart and slipped below its 20-day EMA, indicating short-term weakness, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities.

"Going ahead, the immediate support for Bank Nifty is placed in the 54,900-54,800 zone. Any sustainable move below this zone could result in Bank Nifty extending its weakness towards 54500, followed by 54,100 in the short term. On the upside, the immediate resistance for the Index is placed in the 55,800-55,900 zone," it added.

Nifty Bank slipped below its 20-DEMA and the 50-day EMA on the daily chart, signalling weakness in short-term momentum and persistent selling pressure at higher levels. Immediate downside support is placed in the 54,600–54,200 zone in case selling pressure re-emerges in the near term. 56,400 acts as immediate resistance on the upside, while 56,800 stands as the next key supply zone, said Choice Broking.

"From a momentum standpoint, the weekly RSI at 45.75 indicates subdued momentum with a neutral-to-negative bias. However, failure to reclaim higher levels may keep the index under short-term corrective pressure. Traders are advised to remain cautious and follow disciplined risk management while closely tracking key levels for the next directional move," it added.