The Indian stock markets are expected to open on a negative note amid weak global trends and renewed tensions in West Asia ended the hopes of an end to the US-Iran war. GIFT Nifty also indicates a gap-down start, trading at 23,140 with a discount of 312 points from its previous Nifty futures close.
The Sensex dropped 116.67 points on Friday to close at 74,243.34. The Nifty fell 49.85 points to settle at 23,366.70.
The Indian rupee opened 35 paise lower at Rs. 95.31 per dollar on Monday compared to Friday's close of Rs. 94.94.
Foreign investors net sold shares worth Rs. 8,776 crore, while domestic institutional investors net bought shares worth Rs. 9,134 crore on June 5.
Technically, the Sensex fell 0.71% last week and formed a bearish candle on weekly charts. The index trades below short-term averages, which reinforces negative sentiment.
“On the higher side, the index could bounce back to around 23,700. For the Sensex, the level would be around 75,000. Upside potential may also push the index toward 75,500-75,800. On the flip side, a decline below 73,500 could accelerate selling pressure. If this support is broken, the market could slip to 73,000-72,800,” said Amol Athawale, VP of Technical Research at Kotak Securities.
According to Bajaj Broking Research, the Nifty 50 formed a second consecutive bearish candle on the weekly chart, indicating that the ongoing corrective phase remains intact.
Analysts expect Nifty to consolidate within a broad range of 23,000 to 23,550 in the coming sessions. A break above 23,556 opens the path to 23,750-23,800.
Buyers have stepped in repeatedly at 23,200-23,000. If index breaks below the crucial 23,000 mark, selling could accelerate toward 22,600.
On the upside, the 23,750-23,800 zone remains a key hurdle as it coincides with the 50-day exponential moving average (EMA) and a key trendline resistance. A sustained breakout above 23,800 could open the door towards 24,100.
On Friday, Bank Nifty rose 188.40 points or 0.35% to close at 54,496.25, forming a green candle on the daily chart. On weekly chart the index formed a dragonfly Doji candle, suggesting buying support at lower levels.
The index has largely remained trapped within a broad consolidation range of 52,700 to 55,600 over the past three weeks.
"We expect the index to extend the same and only a breakout or breakdown will signal the next directional momentum in the index," said Bajaj Broking Research.
The brokerage identified the 52,500-53,000 region as a critical support area for Bank Nifty. Resistance sits at 55,200-55,600, where the 50-day EMA meets the top of the recent consolidation range. A clean break above 55,600 opens the path to 56,500.