Indian benchmark indices are set to open higher on Friday amid a slew of positive domestic and global cues including economic outlook, FIIs inflows, supportive dollar and crude oil prices and buying in the global equities. Holding on ceasefire in the Middle East is also improving the sentiments at Dalal Street.

Nifty futures on the NSE International Exchange traded 114 points, or 0.45 per cent, lower at 25,729, hinting at a positive start for the domestic market on Friday. Asia shares hit their highest level in more than three years on Friday. Nikkei soared 1.45 per cent, while Hang Seng rose 0.20 per cent. KOSPI shed 0.75 per cent in the early trade.

Markets may extend gains in early trades as firm global cues coupled with growing expectations that the Federal Reserve may cut interest rates sooner than previously anticipated could emerge as the biggest positive catalyst, said Prashanth Tapse, Senior VP (Research), Mehta Equities. "RBI bulletin saying India's economy is resilient amidst global uncertainties should boost investors' confidence."

Wall Street closed higher on Thursday as the Israel-Iran ceasefire continued. The Dow Jones Industrial Average rose 404.41 points, or 0.94 per cent, to 43,386.84, the S&P 500 gained 48.86 points, or 0.80 per cent, to 6,141.02 and the Nasdaq Composite rose 194.36 points, or 0.97 per cent, to 20,167.91.

In commodities, oil prices were set for a weekly decline with the Iran-Israel ceasefire holding and easing concerns over Middle East supply risks. Brent crude futures were up 0.41 per cent at $68.01 a barrel while US crude rose 0.46 per cent to $65.53 per barrel on Friday, but both were headed for a fall of more than 10 per cent for the week.

The dollar languished near a three-and-a-half-year low on Friday and was headed for a 1.4 per cent weekly loss, its largest decline in over a month. The dollar index was lingering near its lowest since March 2022 at 97.378. Spot gold fell 0.23 per cent to $3,320.25 an ounce.

The current uptrend in the market is being driven by a favourable mix of easing geopolitical tensions, macroeconomic support from weak dollar and benign global rates and strong domestic flows, said Pranay Aggarwal, Director and CEO at Stoxkart. "The rally may persist in the short run but warrants selective, stock-specific participation and close monitoring of global crude, FII flows, and earnings triggers."

Provisional data available with NSE suggest that FPIs turned net buyers of domestic stocks to the tune of Rs 12,594.38 crore on Thursday. On the other hand, domestic institutional investors (DIIs) tuned sellers of Indian equities to the tune of Rs 195.23 crore on a net-net basis.

"After consolidating for over five weeks, markets have finally resumed their uptrend, and we expect markets to gradually move towards their record high," said Ajit Mishra, SVP of Research at Religare Broking. "We continue to favor rate-sensitive sectors such as banking, financials, auto, and realty, while recommending a selective approach for other segments."
 

Nifty & Sensex outlook

Nifty has emphatically surpassed its crucial swing high and this move confirms a breakout from its consolidation phase. Nifty is now expected to head towards the next resistance band of 25,640-25,740, said Nandish Shah, Senior Derivative & Technical Research Analyst, HDFC Securities. "On the downside, the previous resistance of 25,317 is now expected to interchange its role as a strong support," he said.

Shrikant Chouhan, Head Equity Research, Kotak Securities believes that the intraday market texture is bullish, but due to temporary overbought conditions, we could see range-bound activity in the near future. For day traders, buying on intraday corrections and selling on rallies would be the ideal strategy. On the downside, 25,415/83300 and 25,300/83000 would act as key support zones, he said.
 

Nifty Bank outlook

Bank Nifty formed a sizable bull candle with a higher high and higher low signaling strength and continuation of the up move. The index in the process rallied to a fresh all time high, said Bajaj Broking. "This projection is further supported by bullish price structure and momentum indicators. The daily 14 period RSI remains in an up trend, further validating the bullish structure," it said.

Nifty Bank registered a strong bullish candle on the daily chart, strengthening a breakout from the recent consolidation near the 56,500 zone. The move was accompanied by broad-based strength across major banking constituents, said Om Mehra, Technical Research Analyst at SAMCO Securities. "It continues to trade comfortably above all key moving averages, including 50-day SMAs."