The Nifty 50 could come under renewed selling pressure on Friday as surging crude oil prices and escalating geopolitical tensions in the Middle East point to a weak start for Indian equities. GIFT Nifty fell 0.59%, or 138.50 points, to 23,321.50, signalling a potential gap-down opening for domestic benchmark indices.
The weak global cues come after Brent crude surged 6% to $107.21 a barrel, crossing the $107 mark for the first time since May 21. Rising crude prices have heightened concerns over inflation and the potential impact of elevated energy costs on global economic growth.
Nifty Outlook
The technical setup remains weak, with the index struggling to sustain above the 23,400 level and continuing to trade below key moving averages.
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
"On the downside, 23,200 acts as the crucial support level; a decisive break below this level could drag the index toward the 23,000 mark and lower. On the upside, 23,550–23,600 continues to act as the immediate resistance zone, with 23,800 as the next hurdle for the index to clear," said Ponmudi R, CEO of Enrich Money.
ALSO READ: D-Street Set For Red Friday? GIFT Nifty Plunges 130 Points As Crude Oil Hits $107
"The Nifty chart shows a clear sequence of lower highs and lower lows from the initial August peak, while the recent decline has broken below major support levels, confirming increasing selling pressure and highlighting the index's struggle to sustain above 23,400," he added.
Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, said the index continues to trade comfortably below its key moving averages, which are themselves declining, indicating a weak undertone.
Bank Nifty Outlook
Bank Nifty traded with a negative bias throughout Thursday's session, although a sharp recovery of more than 200 points during the closing auction session helped the index finish higher. Bank Nifty settled at 56,472, gaining 0.31% for the session.
Despite the late recovery, the broader technical setup remains weak, with the index trading below its key moving averages. "Going forward, the 56,000–55,900 zone is expected to act as a crucial support area for the index. A sustained breach below 55,900 could intensify selling pressure and lead to a further decline towards the 55,400 mark in the near term," Shah said.
On the upside, the 200-day EMA zone of 56,700–56,800 is likely to act as a significant hurdle.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
