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The GIFT Nifty, an early indicator of the Nifty 50's performance, traded at 24,337 on Friday, suggesting a positive start for Indian equities after the benchmark index broke a seven-session losing streak in the previous session. The Nifty 50 gained more than 0.6% on Thursday, with Eternal rising over 2.4% and Shriram Finance advancing 2%.
The Nifty added 20 points after the closing auction session, while the Bank Nifty and Sensex gained 51 points and 52 points, respectively. The rebound came after a prolonged stretch of losses in Indian equities.
Nandish Shah, Deputy Vice President at HDFC Securities, said the latest recovery helped the Nifty move back above its 50-day and 100-day DEMA levels of 24,188 and 24,203, respectively, indicating an improvement in near-term momentum. However, the index remains below its 20-day EMA at 24,304 and 200-day EMA at 24,377, suggesting that the broader short-term trend has not yet turned decisively positive.
Shah said the 24,000 level remains an important support zone, supported by the 61.8% retracement of the previous upswing and an upward-sloping trendline connecting the April, June and July lows.
" Sustained buying above 24,375 will be crucial to negate the prevailing short-term downtrend and open the door to further recovery," Shah said.
He expects the 24,000-24,050 range to remain a key support area, while 24,300-24,375 could act as the immediate resistance band.
The broader global backdrop remained less supportive. Asian stock markets opened broadly lower on Friday after a sharp decline on Wall Street pushed longer-dated US Treasury yields higher. South Korea's Kospi fell 1.04%, Japan's Nikkei 225 declined 0.96% and Australia's ASX 200 slipped 0.19%.
The overnight US selloff was led by the Dow Jones Industrial Average, which dropped about 700 points, its steepest single-session decline since July 29. The S&P 500 fell 0.9%, while the Nasdaq Composite lost 1%.
US stock futures were largely steady in early Asian trading. Dow futures rose 24 points, while S&P 500 and Nasdaq-100 futures were around the flatline.
Bond markets remained under pressure after the recent Treasury rally faded. The US 30-year Treasury yield rose six basis points to 5.25%, while the 10-year yield ended at 4.70%. Investors continued to assess whether measures to contain borrowing costs would provide lasting relief.
Crude prices also remained elevated. Brent traded above $93 a barrel and was headed for a weekly gain of more than 5%, while West Texas Intermediate moved towards $86 after a five-session advance. Higher oil prices remain an important consideration for Indian markets given their potential impact on inflation and the country's import bill.
For the Nifty, the immediate focus is now on whether the index can sustain its recovery above 24,300 and eventually clear the 24,375 resistance level identified by HDFC Securities.
