Stock market opening: Sensex, Nifty to open higher or lower today?

Benchmark indices are set for a higher start after weak US jobs data improved rate-cut hopes. Higher crude prices and Strait of Hormuz uncertainty could limit gains and keep traders cautious.

In Short

• Dalal Street likely to open higher on Monday following soft US jobs data
• Rising crude prices and Strait of Hormuz risks may limit equity gains
• Foreign investors bought $1.36 billion in Indian stocks last week

Dalal Street is likely to open higher on Monday, tracking gains in Asian markets after weaker-than-expected US jobs data eased concerns over an immediate rise in borrowing costs. However, rising crude oil prices and uncertainty over the reopening of the Strait of Hormuz could limit gains in domestic equities.

GIFT Nifty futures were trading at 24,670.5 as of 7:43 am IST, indicating a positive start for the Nifty 50. The index had closed at 24,570.65 on Friday, down 65.35 points or 0.27%.

Hitesh Tailor, Technical Research Analyst at Choice Broking Private Limited, said Indian equity markets are expected to open on a "mildly positive note", with GIFT Nifty trading around 24,666, up 25 points, indicating a steady start for domestic indices.

Asian markets were trading higher after Wall Street equities gained, as softer US labour market data reduced fears of a near-term Federal Reserve rate hike. Lower borrowing-cost concerns could also support foreign fund flows into emerging markets such as India.

OIL PRICES KEEP INVESTORS CAUTIOUS

The rise in crude oil prices remains a key concern for Indian markets.

Brent crude rose 1.1% to around $84.50 a barrel as uncertainty continued over the reopening of the Strait of Hormuz. Any prolonged disruption to the key shipping route could keep global oil supplies under pressure and raise inflation and growth concerns for oil-import-dependent India.

Iran said an agreement with Oman on new shipping lanes was nearing completion, but Tehran reiterated that the US would need to meet other conditions before the Strait of Hormuz could reopen.

Iranian Foreign Minister Abbas Araqchi also said Tehran would not hold talks with Washington while the US was in breach of the June interim deal.

Supply concerns were further heightened after a Saudi oil facility was attacked over the weekend.

For India, higher crude prices are a negative because the country imports the bulk of its crude oil requirements. A sustained rise in oil prices can put pressure on inflation, the rupee and corporate margins.

FOREIGN INVESTORS RETURN TO D-STREET

Foreign fund flows are providing some support to domestic equities.

Foreign portfolio investors bought Indian stocks worth $1.36 billion last week, following purchases of $2.12 billion in July.

The inflows come after a period of heavy foreign selling earlier this year and could provide support to the benchmarks if the global risk appetite remains favourable.

The Nifty 50 and Sensex gained 0.8% and 0.5%, respectively, last week, helped by the RBI keeping interest rates unchanged, easing crude prices earlier in the week, supportive foreign inflows and resilient corporate earnings.

According to Tailor, the Nifty's failure to sustain above the crucial 24,600 level in the previous session reflected some selling pressure at higher levels. However, the index continues to hold above key moving averages and its RSI of 59.89 remains in the bullish zone, keeping the broader structure constructive.

"24,450–24,500 is expected to act as the immediate support zone, while 24,750–24,800 remains the key resistance area," Tailor said.

He expects the index to remain in consolidation in the near term, with a sustained move above the resistance zone potentially attracting fresh buying.

BANK NIFTY ALSO FACES RESISTANCE

Bank Nifty ended at 57,746.45 on Friday, down 317.20 points or 0.55%, after failing to sustain above the 58,000 mark.

Tailor said the bearish daily candle indicates near-term profit booking, although the index remains above key moving averages.

Immediate support for Bank Nifty is placed at 57,300–57,500, while resistance is seen around 58,200–58,500.

"Strong support at lower levels should limit downside pressure, while renewed participation in heavyweight stocks could help the market regain upward momentum during the session," Tailor said.

The market will have to balance positive global cues against higher oil prices and geopolitical uncertainty.

The weaker US jobs data has improved expectations around the global interest-rate outlook, while continued foreign buying could support Indian equities. However, the situation around the Strait of Hormuz and further movements in crude oil prices remain key risks.

For the Nifty, 24,450–24,500 will be the immediate support zone, while 24,750–24,800 is the key resistance area. A decisive move above the resistance zone could strengthen the bullish momentum, while failure to hold support could keep the index range-bound.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)

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