Stock Market Today: Indian Indices Poised for Volatile Opening Despite Geopolitical Developments
Early indicators on Wednesday suggest a potentially weak start for Indian equity markets, with the GIFT Nifty on NSE IX trading down by 157.50 points, or 0.64 per cent, at 24,417.50. This points towards a negative opening for Dalal Street, although the extension of the US-Iran ceasefire by President Donald Trump could provide some positive momentum.
Tuesday's Market Performance and Key Drivers
On Tuesday, both the Nifty50 and BSE Sensex closed nearly 1% higher, buoyed by stronger global cues, robust fourth-quarter earnings, softer crude oil prices, and a noticeable decline in market volatility. The NSE Nifty climbed 211 points to settle at 24,576, while the BSE Sensex rose 753 points to close at 79,273.
Market sentiment was further supported by short covering and easing selling pressure from foreign portfolio investors (FPIs). Pankaj Pandey, head of fundamental research at ICICI Direct, noted, "There has been short covering by traders because of increased hopes of the de-escalation of the conflict, and a moderation in the intensity of FPI selling in recent sessions."
Technical Outlook and Analyst Views
From a technical perspective, the Nifty has moved above its 50-day moving average, with near-term indicators suggesting a bullish outlook. Rajesh Palviya, head of technical and derivatives research at Axis Securities, stated, "In the coming days, the index could move towards the 24,800-25,000 range, with the positive bias expected to remain intact as long as it holds above the 24,250 level."
Additionally, the India VIX dropped 7 per cent to 17.53, indicating easing investor anxiety. The technical outlook remains constructive, with the index seen potentially moving towards 24,800 levels, while immediate support is placed at 24,400.
Rupee Depreciation Despite Equity Gains
Despite gains in domestic equity markets, the Indian rupee weakened by 28 paise to settle at 93.44 against the US dollar on Tuesday. This depreciation was pressured by a firm greenback and fluctuations in crude oil prices amid lingering uncertainty over peace talks in West Asia.
Forex analysts highlighted that the Reserve Bank of India's recent move to relax restrictions on speculative activity in non-deliverable forward markets also weighed on the rupee. Under the revised framework, authorised dealers can once again offer non-deliverable rupee derivative contracts to both resident and non-resident participants, subject to certain restrictions on related-party transactions, though the $100 million cap on net open positions remains in place.
Global Market Context and Institutional Activity
Globally, US markets ended lower on Tuesday as initial gains faded due to renewed concerns over the Middle East conflict, overshadowing optimism from strong corporate earnings. In Asia, markets showed a mixed trend on Wednesday, with US stock futures edging higher and the dollar remaining firm after President Trump's announcement of an indefinite ceasefire extension with Iran.
Oil prices, which had risen earlier in the session, later slipped as investors reassessed the outlook for US-Iran peace negotiations. On the institutional front, foreign portfolio investors were net buyers, purchasing equities worth Rs 1,919 crore on Tuesday, while domestic institutional investors turned net sellers, offloading shares worth Rs 2,221 crore.
Bank Nifty Outlook and Market Volatility
The Bank Nifty index formed a bullish candlestick pattern, closing firmly above the 200-day EMA. Bias remains positive above the last Wednesday gap-up area of 55,600-55,850, with expectations of the index gradually heading towards 57,700 and 58,500 levels. However, volatility is likely to remain high due to geopolitical tensions and volatile crude oil prices.
From a short-term perspective, support is placed in the range of 54,500–54,000 zone, with the current pullback trend expected to remain intact as long as higher highs and higher lows are maintained in the weekly chart.
