Stock Market Update: Nifty 50, Sensex Likely to Open Higher Amid Slight Strength in Rupee

The Indian stock markets are likely to open on a higher note tracking positive cues from global markets and optimism around US-Iran peace deal. GIFT Nifty also indicates a gap-up start, trading at 24,263 with a premium of 153 points from its previous Nifty futures close.

On Tuesday, the Sensex fell 251.61 points or 0.33% to close at 77,017.79, while the Nifty 50 rose 86.50 points or 0.36% to settle at  24,032.80.

Foreign investors (FIIs) net sold shares worth Rs 3,622 crore, domestic institutional investors (DIIs) net bought shares worth Rs 2,603 crore on May 5.

Meanwhile, the Indian rupee opened higher by 25 paise at Rs. 95.04 per dollar compared to previous close of Rs. 95.29.

Sectorally, auto, FMCG, power, pharma, and telecom indices edged higher by nearly 0.5% each, while the realty index declined 1.4%, consumer durables fell 1% and the private banking index dipped 0.5%.

Sensex Outlook

Technically, the Sensex has support near 76,500 and has witnessed some recovery and has no current direction. 

"For day traders, 76,500 would act as an immediate support zone, while 77,200 or the 50-day SMA would be the key resistance area for the bulls. A successful breakout above 77,200 could push the market up to 77,700-78,000, while below 76,500, the market could retest the levels of 76,200-76,000," said Shrikant Chouhan, Head of Equity Research at Kotak Securities. 

Nifty 50 Outlook

The Nifty 50 briefly touched 23,882 before a late recovery helped defend the 24,000 level. On the daily chart it formed a doji candle indicating buying interest at lower levels.

“A small red candle was formed on the daily cart with a long lower shadow. Technically this market action indicates broader sideways range movement around 24,300 - 23,800 levels. Having bounced back from the lows on Tuesday, Nifty 50 could bounce back towards 24,300 levels in the short term,” said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities. 

A breakout beyond the 24,300-23,800 range could confirm fresh directions for the market, he added.

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Bank Nifty Outlook

On Tuesday, the Bank Nifty declined 331.45 points or 0.60% to settle at 54,547.05, forming a high wave candle that signals consolidation.

"Nifty Bank formed a high wave candle with a lower high and a lower low signaling consolidation with corrective bias. Overall, we expect the Bank Nifty to extend consolidation in the broad range of 54,000-56,500 amid stock-specific action as we progress through the quarterly earnings session of the banking stocks," said Bajaj Broking. 

Within the consolidation a move above the 55,000 levels being the trendline resistance joining recent highs will signal extension of the pullback towards the 56,500 levels. While a break below the key support area of 54,000 will signal extension of the decline towards 52,500 levels. It has immediate support around 54,000 levels being the confluence of the recent low, it adds.