Sensex, Nifty May Remain Directionless Amid Trade Tensions: Key Levels to Watch on July 8

Tuesday, July 8: Indian equity markets are anticipated to experience a potentially volatile session on Tuesday, July 8. Global trade tensions are expected to weigh heavily on investor sentiment, suggesting that traders will remain cautious following a lacklustre performance in the previous session. Key geopolitical and economic triggers are looming, contributing to the uncertain outlook.

Market Recap: July 7 Session Ends Flat

On Monday, July 7, India’s benchmark indices concluded the trading session largely flat, in what was a range-bound day. The subdued market action stemmed from investor caution ahead of crucial Q1 earnings announcements and the keenly watched US-India trade negotiations. Market participants remained wary as the countdown to new US tariffs under Donald Trump’s administration continues, with steep duties on imports from 14 countries, including India, set to take effect from August 1.

Despite the prevailing uncertainty, both Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) were net buyers on the day. FIIs collectively purchased shares worth ₹321 crore, while DIIs bought equities valued at ₹1,853 crore.

Volatility and Derivatives Signal Nervous Sentiment

The India VIX, a key gauge of market volatility, edged up by 2%, closing at 12.56. Although this figure remains below the psychological mark of 15, the increase in volatility points to rising nervousness among traders. The Put-Call Ratio (PCR) remained stable at 0.79, indicating a slightly bearish undertone due to elevated call writing. However, the relatively low VIX continues to reflect a generally stable market environment, suggesting that major sharp movements are not immediately expected.

Technical Levels to Track for Nifty and Bank Nifty

Nifty 50

• Resistance: The immediate resistance zone for Nifty has shifted to the 25,500–25,600 range. Significant call writing activity has been observed in this band, making it a tough barrier for the index to breach.
• Support: On the downside, 25,300 has emerged as a critical short-term support level. A decisive breakdown below this mark could trigger further declines towards the psychological 25,000 mark.
• Bullish Trigger: A strong close above 25,600 could reignite bullish momentum, potentially leading the index towards the 26,000 level.

Bank Nifty

• Resistance: The index faces overhead resistance in the 57,200–57,300 range.
• Support: Firm support for Bank Nifty lies at 56,500. This level is reinforced by the 10- and 20-day Exponential Moving Averages (EMAs), which the index has respected in recent sessions.
• Outlook: A breakout above 57,300 with robust trading volumes could open the path towards 57,500. Conversely, a breach below 56,500 may pull the index down towards 56,000.

Early Cues and Global Overhang

Early morning cues on Tuesday, July 8, suggest a weak opening for the Indian markets, with GIFT Nifty trading slightly up by 0.17% at 25,519 around 8:30 AM IST. Broader market sentiment remains fragile amid the absence of strong positive global triggers and the looming deadline for US tariff hikes.

What’s Ahead for the Day?

As geopolitical trade risks escalate and domestic investors await clarity on various economic fronts, including the finalisation of the US-India trade deal, the Indian markets are likely to remain in consolidation mode. Traders are advised to keep a close eye on the aforementioned key resistance and support levels for directional cues in the sessions ahead.

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