Indian equity benchmark indices are likely to open on a positive note, tracking the global cues. However, upside may remain capped amid the cautious undertone led by geopolitical concerns, weakness in the Indian rupee and persistent FII outflows. Stock specific actions may be seen following Q4 earnings.

Indian equities are expected to trade in a broader range in the near term, as elevated Brent crude prices and a weakening rupee continue to create a fragile environment for domestic markets and remain among the key concerns for investors, said Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services.
 

GIFT Nifty, Asian markets & US stocks

GIFT Nifty Futures or Nifty futures on the NSE International Exchange were 68.10 points, or 0.29 per cent, up at 23,530.50, hinting at a positive start for the domestic market on Thursday. Asian stocks rose on Thursday amid AI-enthusiasm. KOSPI and Hang Seng were up a per cent each, while Nikkei gained nearly half a per cent.

US stocks mostly gained ground on Wednesday with a boost from artificial intelligence-related tech shares. The S&P 500 gained 43.29 points, or 0.58 per cent, to ​7,444.25 and the Nasdaq Composite rose 314.14 points, ​or 1.20 per cent, to 26,402.34. However, the Dow Jones Industrial Average fell 67.36 points, or 0.14 per cent, to 49,693.20
 

Crude, US dollar, gold & more

Brent crude futures were little changed at $105.76 a barrel in early trading, while US West Texas Intermediate futures fetched $101.14 per barrel. Oil prices remain well above the pre-war levels, fanning inflation worries worldwide. The dollar index was seen at 98.458 in early trading.

Gold prices ticked up on Thursday, buoyed by a weaker dollar, as investors focused on talks between US President Donald ​Trump and Chinese President Xi Jinping. Spot gold rose 0.3 per cent ‌to $4,699.87 per ounce, while Spot silver fell 0.4 per cent to $87.64 per ounce.

Investor sentiment remained cautious amid ongoing geopolitical uncertainty surrounding the US-Iran conflict and persistent foreign institutional outflows, said Ajit Mishra, SVP of Research at Religare Broking. "Traders may continue to find opportunities on both sides of the market, though we maintain our preference for pharma, healthcare, metals, and energy counters for long trades."
 

FII-DII flows

Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 4,703.15 crore on Wednesday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 5,869.05 crore on a net-net basis.
 

Nifty50 & Sensex outlook

Technically, the market witnessed a pullback rally but failed to close above the 23,500/75,000 resistance mark, which is largely negative, said Shrikant Chouhan, Head of Equity Research at Kotak Securities. "It is currently trading comfortably below short-term averages and holding a correction continuation formation on intraday charts, which supports further weakness."

The short-term market outlook remains bearish. However, a pullback rally could occur if the market trades above 23,500/75,000. Above this level, 23,650-23,700/75,500-75,700 would be the next resistance zones for traders. On the flip side, 23,350/74,500 would act as an immediate support zone for day traders. Below this level, it could retest 23,250/74,200, Chauhan adds.

Sensex formed a small bullish candle on the daily chart, suggesting temporary stabilization after recent selling pressure, said Aakash Shah, Research Analyst, Choice Equity Broking. "Immediate support is placed near 73,700–73,900. On the upside, resistance is positioned near 75,300–75,500, and a decisive move above this zone may trigger further recovery."

The daily RSI for Nifty continues to remain in a bearish crossover, suggesting that the negative momentum is still intact, said Rupak De, Senior Technical Analyst at LKP Securities. "On the upside, the 23,500 zone continues to act as a strong resistance level. In the near term, the index may remain under pressure, while immediate support is placed around 23,150–23,200."
 

Nifty Bank outlook

Bank Nifty staged a gradual rebound and it formed a small-bodied bearish candle with wicks on both sides on the daily charts, reflecting indecision in the near term. The index remains positioned in the lagging quadrant of the Relative Rotational Graph, indicating weak relative strength and momentum, said Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities.

"Going ahead, the immediate support for Nifty Bank is placed in the 53,100-53,000 zone. Any sustainable move below this zone could result in Nifty Bank extending its weakness towards 52,600, followed by 52,300 in the short term. On the upside, the immediate resistance for the Index is placed in the 53,800-53,900 zone," he adds.

Nifty Bank formed a high wave candlestick pattern with a lower high and a lower low signaling extension of the decline and continuation of the downtrend for the fourth session in a row, said Bajaj Broking. "Bias continues to remain down and a breakdown area of 54,400 and a follow through weakness will open further downside towards 52,700-52,400 levels," it added.