Indian equity benchmark indices are set for a gap-up open on Monday supported by positive global cues and sharp fall in the crude oil prices with reopening of Strait of Hormuz. Sentiments stand positive amid the ongoing US–Iran negotiations as India Inc is entering the last week of the Q4 earnings.

Indian equities could witness volatility amid the monthly expiry along with gradual upside given crude oil prices continue to soften, the Indian rupee sustains its recovery from recent record lows and constructive developments in the ongoing peace talks continue, 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 214.50 points, or 0.90 per cent, up at 23,958.50, hinting at a positive start for the domestic market on Monday. Asian stocks rose on Monday as the prospect of a deal to end the Iran war buoyed ​risk appetite. Nikkei gained more than 3.2 per cent, while Hang Seng and KOSPI gained nearly a per cent each.

US ‌stocks rose on Friday as investors cheered signs of progress in talks to end the Middle East conflict and a strong corporate earnings season. The Dow Jones Industrial Average rose 0.58 per cent to 50,579.70, a record closing high. The ​S&P 500 gained 0.37 per cent to 7,473.47 and the Nasdaq Composite jumped or 0.19 per cent to 26,343.97.
 

Crude, US dollar, gold & more
Oil prices hit two-week lows to kickstart the ​week with Brent crude futures down over 4 per cent to $98.83 a barrel, while U.S. West ​Texas Intermediate was at $92.03 a barrel, down 4 per cent. US dollar in early trading as the safe haven dollar gave up some of its recent gains as the dollar index was seen at Rs 98.96. Bitcoin was up 0.6 per cent at $77,043.60. Gold prices rose over 1 per cent.
 

Amid the geopolitical uncertainty, currency volatility, elevated crude oil prices, and uncertain foreign flows, investors should maintain a cautious and selective approach, said Ajit Mishra, SVP of Research at Religare Broking. "Traders should avoid aggressive leverage and continue to follow disciplined risk management practices. A hedged and stock-specific approach will remain critical."
 

FII-DII flows
Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 4,440.47 crore on Friday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 6,003.53 crore on a net-net basis.

Key reasons behind FIIs' sustained selling include  poor earnings growth in India, much better earnings growth and prospects for earnings growth in other markets, high bond yields in the US and weakness in the rupee with fears of further depreciation, said Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments.
 

Nifty50, Sensex & VIX outlook
Technically, a bullish candle has formed on weekly charts and it is witnessing positive consolidation on daily charts, near the 50-day SMA. For positional traders, the 50-day SMA or 23,700/75,400 would act as an immediate support zone. As long as the market remains above this level, the positive sentiment may continue, said Amol Athawale, VP of Technical Research at Kotak Securities.

"On the higher side, 23,850/75,900 could act as an immediate resistance for the bulls. A successful breakout above 23,850/75,900 could push the market up to 24,000–24,200/76,400-77,000. If the market drops below 23,700/75,400, the sentiment could change. Below this level, the index could retest the levels of 23,400–23,300/74,500-74,200. Downside may also continue, dragging it to 23,150/73,800," he added.

On the downside, immediate support is placed at 23,600, below which the index may drift towards 23,400. A breach below 23,400 could trigger a sharper correction in the market. On the higher side, a decisive move above 23,800 may induce a fresh directional up move in the short term, said Rupak De, Senior Technical Analyst at LKP Securities.

Sensex faced selling pressure near the 75,800–76,000 zone, highlighting the presence of supply at higher levels. Immediate support is now placed around 74,800–75,000, while resistance is seen near 76,000–76,200. A sustained move beyond either side of this range could provide the next directional trend for the market in upcoming sessions, said Hitesh Tailor, Technical Research Analyst at Choice Equity Broking.

The India VIX declined nearly 5 per cent during the week and closed below the 18 mark. A further cooling-off in volatility would continue to support bullish sentiment in the market, said Nilesh Jain, VP of Head of Technical and Derivative research at Centrum Finverse.

Nifty Bank outlook
Nifty Bank extended gains, supported by robust buying in the private banking space. It continued to consolidate, with the flat RSI continuing to reflect a sideways trend, said Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities.

"Going ahead, the immediate resistance for Bank Nifty is placed in the 54,400-54,500 zone. Any sustainable move above this zone could result in Bank Nifty extending its pullback towards 54,900, followed by 55,300 in the short term. On the downside, the immediate support for Bank Nifty is placed in the 53,600-53,500 zone," he said.

Nifty Bank in the weekly chart formed a bullish candlestick pattern with a lower high and a lower low highlighting buying demand at lower levels from near the key support area of 52,400-52,700 levels. It is likely to consolidate in the range of 52,700-54,700. A move above 54,700 will open further upside towards 56,000 levels in the coming week, said Bajaj Broking.

"From a short-term perspective Index need to start forming higher high and higher low on a sustained bass in the daily chart and move above the recent breakdown area of 54,500-54,700 to signal a reversal of the corrective trend. Key support is placed at 52,700-52,400 levels and the 61.8 per cent retracement of the previous pullback (49,955-57,456)," it adds.