Indian benchmark indices are likely to open on a muted on Tuesday, following feeble industrial output data. However, global cues continue to remain positive but traders shall shift their focus towards monsoon update, tariff deal with US and Q1 earnings by India Inc due later this month.
Nifty futures on the NSE International Exchange traded 18.30 points, or 0.07 per cent, higher at 25,632.50, hinting at a muted start for the domestic market on Tuesday. Asian shares crept higher. Nikkei tanked more than a per cent, while Hang Seng was down 0.75 per cent. However, KOSPI rallied 1.75 per cent in the early trade.
Despite a positive global setup and renewed FII interest, domestic markets remain under pressure due to profit booking and sector-specific weakness, said Vikram Kasat, Head of Advisory at PL Capital. “Markets will track June auto sales data, Q1 pre-earnings commentary, global oil price movements, and FII activity, which could steer near-term direction,” he said.
The S&P 500 and Nasdaq reached record closing highs on Monday, capping their best quarter in over a year. The Dow Jones Industrial Average rose 275.50 points, or 0.63 per cent, to 44,094.77, the S&P 500 gained 31.88 points, or 0.52 per cent, to 6,204.95 and the Nasdaq Composite gained 96.28 points, or 0.48 per cent, to 20,369.73.
In commodities, Brent crude futures for September delivery fell 0.3 per cent to $66.58 a barrel, while US crude dipped 0.4 per cent to $64.86 a barrel, weighed by expectations of an OPEC+ output hike in August. Spot gold rose 0.5 per cent to $3,319.55 per ounce.
The US dollar languished near multi-year lows on Tuesday as markets awaited a vote over President Donald Trump’s landmark tax and spending legislation and uncertainty around trade deals continued to weigh on sentiment. The dollar index slipped to 96.688, its lowest since February 2022.
“We continue to advocate a ‘buy-on-dips’ approach, with a strong emphasis on selective stock picking. Our preference remains with the rate-sensitive sectors—namely banking, financials, auto, and realty, said Ajit Mishra, SVP of Research at Religare Broking. “The ongoing strength in the broader indices is creating additional opportunities, but participants should stay cautious and limit positions to the fundamentally-sound counters only.”
Provisional data available with NSE suggest that FPIs turned net buyers of domestic stocks to the tune of Rs 831.50 crore on Monday. On the other hand, domestic institutional investors (DIIs) tuned sellers of Indian equities to the tune of Rs 3,497.44 crore on a net-net basis.
Nifty & Sensex outlook
Nandish Shah, Senior Derivative & Technical Research Analyst at HDFC Securities said that Nifty’s short-term trend remains positive as it is still positioned above its nearest moving average support of the 5-day EMA. “Nifty has formed a bearish engulfing candlestick pattern on the daily chart, which signals potential weakness. Any move and close above 25,740 would negate this gap resistance and could potentially extend the Nifty’s upward rally towards the 26,000 mark,” he adds.
“We believe that 25,470/83,500 will act as a key level to watch. Below 25,470/83,500, we could see a further correction towards 25,375–25,300/83,200-83,000, said Shrikant Chouhan, Head Equity Research at Kotak Securities. “A sustained move above 25,470/83,500 could push the market up to 25,600/83,900. Ipside may also continue, potentially lifting the market to 25,700/84,200.”
Nifty Bank outlook
Bank Nifty formed a narrow-bodied bearish candle on the daily chart, reflecting mild profit booking at elevated levels, said Bajaj Broking. “The index is currently perched above its immediate support zone of 57,000–56,800. Sustaining above this demand zone will keep the short-term bias constructive, paving the way for a potential move towards 58,500,” it said.
Nifty Bank is holding firmly above all the short and medium-term moving averages. It may see a shallow retracement toward the 57,000-56,800 zone, which is expected to act as immediate support. Any dip toward this zone is likely to attract fresh buying interest as long as the structure remains above 56,300 on a closing basis, said Om Mehra, Technical Research Analyst, SAMCO Securities.
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