Indian equities are set for a gap-down opening today, as weak cues from global markets weigh heavily on investor sentiment. The broader market outlook remains cautious, with key indices expected to open lower, reflecting the negative sentiment prevailing in global financial markets.
Global Market Overview
Asian markets opened in the red, extending their weakness as major Asian economies resumed trading after long holidays, only to face a bleak global backdrop. U.S. equity index futures plummeted sharply after President Donald Trump announced new trade tariffs on Canada, Mexico, and China over the weekend. This move has sparked concerns over a potential global trade war, sending shockwaves through global markets. The imposition of these tariffs threatens to disrupt global supply chains, raising the specter of inflation and stalling economic growth.
Commenting on the unfolding situation, Uday Kotak remarked, “Trump, tariffs, turbulence. The US imposing fresh import duties on Canada, Mexico, and China will have a major impact on global supply chains and markets. It’s time for emerging markets, including India, to prepare for and be resilient to potential outflow shocks from global investors.” This sentiment underscores the heightened risk aversion that could see capital moving out of emerging markets like India, adding pressure on domestic equities.
GIFT Nifty Signals Weak Start
The GIFT Nifty is pointing towards a weak start for Indian equities, with the futures trading at 23,360, down 195 points or 0.83%. This indicates that the benchmark Nifty 50 could open significantly lower, tracking the bearish trend in global markets.
Sectoral Outlook: Focus on Consumer and Oil Upstream Stocks
From a sectoral perspective, consumer and oil upstream stocks are expected to remain in focus, with buying interest likely to emerge at lower levels. On the flip side, technology, selective auto, and metal stocks are expected to remain under pressure throughout the trading session, as investors weigh the implications of the escalating trade tensions on global demand and corporate earnings.
Technical Outlook: Nifty and Bank Nifty Levels
On the technical front, key support and resistance levels for the Nifty and Bank Nifty are as follows:
- Nifty Near Future:
- Support: 23,310 / 23,235
- Resistance: 23,558 / 23,592
- Bank Nifty Near Future:
- Support: 49,128 / 48,926
- Resistance: 49,862 / 49,984
The Nifty’s ability to hold above the 23,310 support level will be critical for preventing a deeper correction. However, any recovery attempts could face resistance near the 23,558 mark. For the Bank Nifty, support at 49,128 will be closely monitored, while upside movements may be capped around 49,862.
