Indian equity markets are set for a potentially positive start today, with the GIFT Nifty trading 40 points higher in early hours. This pre-market rise suggests a cautious optimism among investors, but lingering global trade tensions and mixed international cues are expected to influence the trading session. Market participants will closely watch key support and resistance levels for the Nifty 50 and Bank Nifty, along with the behavior of foreign and domestic institutional investors.
Global Cues and Domestic Market Impact
The GIFT Nifty, a derivative of the Nifty 50 index traded on the NSE International Exchange (NSE IX), signals the likely opening direction for India's benchmark index. Its 40-point gain indicates an initial upward bias for the domestic market. The GIFT Nifty operates in two sessions daily, providing a real-time view of market sentiment influenced by global developments even before Indian markets open.[datainsightsmarket+4]
Despite the positive GIFT Nifty signal, the broader global backdrop remains mixed and cautious. Asian markets, including Japan's Nikkei 225, China's Shanghai Composite, and South Korea's Kospi, traded lower today. This weakness stemmed from renewed concerns over US tariff threats against European countries, which revived fears of escalating trade tensions. The US stock market was closed yesterday for a holiday, but futures indicated a negative session ahead due to these trade worries. Such international events significantly influence investor confidence and capital flows into emerging markets like India.[m+8]
Crude oil prices also saw a slight increase yesterday. India imports over 85% of its crude oil requirements, meaning higher prices can negatively impact the nation's trade deficit, raise input costs for various industries, reduce corporate profitability, and fuel inflation. This creates an additional layer of caution for the Indian market.[bajajbroking+1]
Nifty 50 Levels to Watch
Technical analysts suggest the Nifty 50 index may trade sideways today, influenced by global cues and ongoing corporate earnings reports. For a meaningful upside move, the Nifty needs to decisively cross above the 25,700 level, which could trigger a short-covering rally towards the 25,900 zone. Other resistance points are identified around 25,770 and potentially up to 26,100-26,150 if bullish momentum sustains. A sustained move above 25,820 would help ease current corrective pressure.[m+7]
On the downside, immediate support for the Nifty 50 is seen in the 25,500-25,470 range. A breakdown below 25,575 could open the door for further declines towards 25,450 levels. Analysts also point to 25,500 as a key Put base, indicating it acts as an immediate support area. The overall trading range for the Nifty spot is expected to be between 25,400 and 25,750. The India VIX, a measure of market volatility, rose 4% to 11.83 levels, signaling an increase in market fear.[samco+9]
Bank Nifty and Institutional Activity
The Nifty Bank index also closed lower in the previous session, failing to hold above the psychological 60,000 mark. For today's session, immediate support for Bank Nifty is placed at 59,600-59,550. Resistance levels are seen around 60,100-60,200, with a sustained close above 60,200 needed for a significant breakout. Options data shows the highest Call open interest at the 60,000 strike and the highest Put open interest at 59,500, marking these as crucial near-term boundaries for the index. The banking sector generally shows more constructive sentiment than the broader market, with potential for outperformance if headline indices stabilize.[samco+4]
Foreign Institutional Investors (FIIs) remained net sellers in the Indian cash market yesterday, offloading shares worth ₹3,263 crore. In contrast, Domestic Institutional Investors (DIIs) provided crucial support by buying equities worth ₹4,234 crore. FII activity often drives short-term market momentum, while DIIs typically act as stabilizers, absorbing selling pressure during volatile periods. Persistent FII selling remains a key concern for the market.[m+11]
Sectoral Focus and Economic Backdrop
In terms of sectoral performance, market expert Gautam Shah suggests that PSU banks and metals could offer better risk-reward opportunities. Sandip Sabharwal, another market expert, sees stable earnings from IT and banking sectors, and expects Non-Banking Financial Companies (NBFCs) to outperform in an easing interest rate cycle. However, the banking sector faces ongoing challenges related to deposit growth and liquidity. Defence and oil & gas stocks are also in focus following recent strategic partnership discussions and an LNG deal between India and the United Arab Emirates.[m+2]
The Indian economy continues to show resilience, with its economic value expanding by 8.2% year-over-year in the second quarter of fiscal 2025-26. This growth is largely powered by robust private consumption and investment, supported by easing inflation and favorable rural conditions. Despite this strong domestic picture, global headwinds, such as higher US tariffs and volatile capital outflows, continue to influence market sentiment.[upstox+1]
The rupee depreciated by 12 paise against the US dollar yesterday, trading slightly above its record low. Meanwhile, gold and silver prices climbed to fresh peaks, driven by investors seeking safe-haven assets amid intensifying trade tensions.[deloitte+2]
Overall, today's trading session is expected to be influenced by a tug-of-war between the positive opening indicated by GIFT Nifty and the cautious sentiment stemming from global trade tensions and FII outflows. Traders should remain vigilant, focusing on key technical levels and institutional flows to navigate the market effectively.[livemint+1]
