The Indian stock market opened higher tracking the sharp overnight sell-off on Wall Street following hotter-than-expected US inflation data. Nifty 50 opened 48.6 points or 0.21% higher at 22,671.30 from the previous day's close, while Bank Nifty started at 55,445.75, up 129.75 points. Sensex edged higher by 183.91 points to 72,965.80.
Among broader indices, the Nifty midcap and smallcap indices ended with marginal losses. Foreign institutional investors (FIIs) were net sellers of Rs. 1,019.79 crore in Indian equities on Wednesday, while domestic institutional investors (DIIs) net bought Rs. 1,926.57 crore, according to the exchange's provisional data.
Sensex Outlook
After a muted open, the Sensex faced resistance near 73200 and reversed sharply. It also formed a bearish candle on the daily chart. We believe 72,500 and 72,300 remain strong support levels for the market. As long as the market trades above these levels, a pullback is likely to continue.
On the upside, 73,200-73,500 will act as a key resistance zone for the bulls. A successful breakout above 73,500 could push the market toward 74,000. Conversely, a fall below 72,300 would make the uptrend vulnerable. Below this level, traders may consider exiting their long positions, said Shrikant Chouhan, Head Equity Research, Kotak Neo.
Nifty 50 Outlook
On the daily chart, Nifty 50 formed a bearish-bodied candle with upper and lower wicks, indicating indecision among traders.
“Going forward, the 22,500-22,480 zone could act as immediate support. A decisive break below this zone could revive downside momentum towards 22,330. On the upside, 22,770-22800 could act as an immediate hurdle. A sustained move above this zone could extend the pullback rally towards 22,950. Until a decisive breakout emerges, the index is likely to remain range-bound, with the broader structure still cautious,” said Sudeep Shah, Head, Technical and Derivatives Research at SBI Securities.
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Bank Nifty Outlook
The Bank Nifty is trading below its key moving averages, which continue to act as resistance. Meanwhile, momentum indicators reflect a neutral bias, suggesting a lack of strong directional momentum in the near term.
The 56,000-56,100 zone, which coincides with the 50-day EMA, is likely to act as a significant hurdle for the index. On the downside, the 54,800-54,700 zone remains a crucial support area. A decisive move beyond either of these levels could trigger the next meaningful trending move in the index