Buoyed by declining crude oil prices and an upbeat mood across Asian markets, Indian equity benchmarks started the session in positive territory. The Nifty 50 advanced 47.5 points, or 0.21%, to begin at 22,603.25 relative to its prior close, whereas Bank Nifty opened at 54,901.30, marking a gain of 187.2 points. Meanwhile, the Sensex climbed 125.58 points to reach 72,508.05.
Mirroring the benchmark gauges, broader market indicators saw gains, with both the Nifty Midcap and Smallcap indices rising by 0.5% each. On Tuesday, the Indian rupee opened virtually unchanged at Rs. 96.31 against the US dollar, compared to its preceding close of Rs. 96.30.
Foreign institutional investors (FIIs) persisted with their selling streak on October 5, unloading stocks valued at Rs. 4,699 crore. In contrast, domestic institutional investors (DIIs) sustained their buying support, acquiring equities totaling more than Rs. 5,181 crore during the same trading day.
Sensex Outlook
From a technical standpoint, the Sensex has developed a reversal formation on the daily timeframe following an extended correction phase, though the near-term market sentiment stays fragile.
“We believe 72,000 and 71,800 will act as key support levels for day traders. As long as the market trades above these levels, the pullback is likely to continue. On the upside, the index could rebound to 72,800, with further gains potentially taking it to 73,000. Conversely, a break below 71,800 could accelerate selling pressure and lead to a retest of the 71,500-71,300 range,” said Shrikant Chouhan, Head of Equity Research, Kotak Securities.
Nifty 50 Outlook
The Nifty 50 printed a high wave candle characterized by a compact body and extended shadows on both ends, pointing to expected intraday turbulence.
“Going ahead, strength above last two sessions almost identical high of 22,621 will open further pullback towards 22,750 and 23,000 levels in the coming sessions. Failure, to move above last two sessions high will signal consolidation in the range of 22,200-22,620 ahead of the RBI monetary policy meeting. On the downside, a break below 22,180 could drag the index toward 22,000. For a meaningful trend reversal index would require forming a sustained Higher High-Higher Low structure and reclaim the 23,000-23,100 level,” Pabitro Mukherjee, Deputy Vice President-Research, Bajaj Broking.
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Bank Nifty Outlook
Having breached its support trendline last week to drop to 53,785, Bank Nifty has staged a recovery over recent sessions as the daily relative strength index (RSI) bounced back from oversold territory. This prior support level is projected to transition into a resistance barrier near 55,500.
On the downside, the index could retest the swing low of 53,785 and then drift lower towards 52,800. The bearish view remains valid as long as Bank Nifty trades below 56,210. A sustained hold above 54,000-54,200, along with an improvement in the RSI, could support a recovery in the coming sessions.
