Stock Market Update: Nifty 50, Sensex Likely to Open Flat Amid Decline in Rupee

Indian markets are headed for a gap-down open as US-Iran uncertainty keeps global cues mixed. GIFT Nifty suggests a gap-down start, trading at 24,428 with a discount of 68 points from its previous Nifty futures close.

On Wednesday, the Sensex gained 940.73 points or 1.22% to close at 77,958.52, while the Nifty 50 advanced 298.15 points or 1.24% to settle at 24,330.95.

Foreign investors (FIIs) net sold shares worth Rs. 5,835 crore, and domestic institutional investors (DIIs) net bought shares worth Rs. 6,837 crore on May 6.

The broader markets outperformed, with the Nifty Midcap and Smallcap indices rising nearly 2% each.

The Indian rupee started the day lower by 13 paise at Rs. 94.74 against the US dollar on Thursday, 7 May, after yesterday’s close at Rs. 94.49.

Sensex Outlook

Technically, the Sensex formed a bullish candle on the daily chart and closed the session above the 77,500 level, a positive for the index.

"For traders, 77,500 and 77,300 would be crucial support zones. As long as the market is trading above these levels, the uptrend wave is likely to continue. On the higher side, the rally could extend till 78,300-78,500. However, below 77,300, the uptrend would become vulnerable. Below this level, traders may prefer to exit their long positions," said Shrikant Chouhan, Head of Equity Research at Kotak Securities.

Nifty 50 Outlook

The Nifty 50 formed a hammer-like candle on the daily chart with strong buying interest at the lower levels.

"Nifty formed a bullish candlestick pattern with a higher high and higher low, indicating continuation of the recent pullback. The index is currently near the upper band of the 23,800-24,400 range, which remains a key zone. A breakout above 24,400 can open upside towards 24,600 and 24,800 in the coming sessions. Failure to cross 24,400 may lead to continued consolidation, with support placed around 23,800," stated Bajaj Broking Research.

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Bank Nifty Outlook

The Bank Nifty gained 1,434.00 points or 2.63% to settle at 55,981.05. Forming a bullish candle with a long lower wick. This suggests buying interest at lower levels.

“The index had been consolidating within the 55,602-54,222 range and had delivered a decisive breakout above this zone. The immediate resistance for the index is placed in the 56,300-56,400 zone. Any sustainable move above this zone could result in the index extending its pullback towards 56700, followed by 57,000 in the short term. On the downside, the immediate support for Bank Nifty is placed in the 55,600-55,500 zone," said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities.