Indian Stock Market Anticipates Flat Opening Ahead of RBI MPC

The Indian stock market is poised for a flat opening on March 6, 2024, with early indicators from the GIFT Nifty suggesting minimal change. The GIFT Nifty was trading at 26,206, reflecting a decline of 7 points compared to its previous closing. Global market cues are providing a moderately positive backdrop, although domestic sentiment remains cautious.

On March 5, benchmark indices faced pressure for the third consecutive day. The Sensex fell by 503.63 points, or 0.59%, concluding at 85,138.27. Similarly, the Nifty 50 dropped 143.55 points, or 0.55%, to finish at 26,032.20. Most sectoral indices closed lower, particularly in metal, oil and gas, private banking, media, and consumer durables. The midcap index slid by 0.22%, while the smallcap index decreased by 0.55%.

Market analysts noted that sentiment was further affected by the National Stock Exchange’s (NSE) recent sectoral index reshuffle under guidelines from the Securities and Exchange Board of India (SEBI), which impacted major banking constituents.

Market Outlook for Sensex and Nifty

Technical analysis indicates a weak intraday setup for the Sensex, which has formed a lower top and a bearish candle on the daily chart. The critical level to monitor is 85,000; maintaining this threshold may lead to a potential rebound towards 85,500 to 85,800. Conversely, a drop below 85,000 could trigger increased selling pressure, pulling the index closer to the range of 84,500 to 84,300.

The Nifty 50 index is exhibiting uncertainty, reflected in the formation of small red candles on both sides. The key pivot area on the downside remains between 26,100 and 26,200, while long-term resistance is identified at 26,300. A sustained move above 26,300 could initiate a rally towards 26,500. Should it remain below 26,000, further profit-taking may drive it down to the 25,900 to 25,800 range.

The Nifty options data indicates significant call writing at the 26,100 and 26,300 levels, along with substantial put open interest at 26,000, which denotes a critical support zone.

Bank Nifty Performance and Economic Sentiment

The Bank Nifty closed at 59,273.80, down 0.68%, showing selling pressure from higher levels. Analysts predict that the Bank Nifty will likely trade within a range of 58,500 to 60,100 leading up to the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) meeting. Support is anticipated in the 58,300 to 58,600 area, with resistance expected around 59,600 to 59,700. If it can sustain above 59,700, the Bank Nifty may attempt to reach levels between 60,200 and 61,000.

Market sentiment remains cautious due to diminished expectations for an immediate rate cut from the RBI, prompted by robust GDP data alongside ongoing uncertainties in US-India trade discussions. Analysts suggest that the current outlook points towards consolidation; however, clarity in these discussions could enable a resumption of the long-term positive trend.

Investors are encouraged to stay informed and conduct thorough research before making any investment decisions, as market conditions can shift rapidly.