Stock Market Outlook Today, June 18: Fed Holds Rates, US-Iran Peace Deal In Focus; Will Sensex, Nifty Rise?

Stock Market Outlook Today, June 18: Indian benchmark indices are expected to open higher on Thursday after ending the previous session at their highest closing levels in almost six weeks. Rising global sentiment, softening crude prices and strong support from GIFT Nifty are expected to help Dalal Street begin in positive territory; however, investors will remain cautious following the US Fed’s latest policy decision to keep the interest rates in the United States unchanged. While the Nifty 50 gained for the fourth session in a row, reclaiming its lost ground of the 24,000 mark, the Sensex also held on to the gaining momentum as investors’ sentiments turned optimistic due to receding geopolitical tensions and an upswing in the global market.

The markets are likely to have another good start in India, according to early indications.

As of 7:44 am, Gift Nifty jumped 109.5 points or 0.46% and was trading at 24,065. The contract was trading at 24,099.50 as compared to 23,955.50 from the previous closing.

1. Dalal Street marks six-week high in last session

Indian equities advanced for a fourth consecutive session Wednesday, bolstered by broad-based gains and slumping crude oil prices. The S&P BSE Sensex ended the day 0.45% higher at 77,155.62. The Nifty 50 Index closed 0.40% up at 24,085.70. India has recaptured its status as the world’s fourth-biggest equity market by value, with its overall market capitalisation topping $5 trillion.

2. Wall Street steady in wake of Fed decision

US stocks remained relatively flat post the Fed’s policy announcement as central bankers held rates steady. The US Federal Reserve, led by Kevin Warsh, voted to keep its benchmark interest rates unchanged at 3.5%-3.75% following its most recent policy meeting. The S&P 500 and the Dow Jones Industrial Average indices closed with modest gains, while the tech-heavy Nasdaq Composite reversed an early dip to close higher. A lack of significant reaction may point to investors awaiting further clues on where the US Fed sees interest rates for the rest of the year.

3. Asian markets soar

Asian shares advanced on Thursday as a US-Iran peace deal lifted global risk appetite. As I write this:

Japan’s Nikkei 225 rose 1.91%
South Korean market index Kospi advanced 0.60%
Australia’s ASX 200 dropped 0.43%
New Zealand’s NZX 50 down 0.12%
Hong Kong’s Hang Seng down 1.56%

The positive trend seen in most Asian markets could add some more support to Indian equities.

4. Crude oil drops under $79

Oil prices fell further after the U.S. and Iran signed a peace agreement that eased supply fears through the Strait of Hormuz.

Brent crude was below the price band of $79 per barrel.
WTI crude was trading near $76 per barrel.

Lower crude prices would be a positive event for the Indian economy – inflation may come under control, the trade deficit may reduce and the cost of imports may decrease.

5. Will Nifty maintain above 24,000 levels?

Nifty has become technically stronger, with Nifty decisively breaching the psychological round level of 24,000, stated Bajaj Broking Research.

The index tested the upper boundary of its two-month falling channel around 24,100, which also coincides with the previous swing high recorded on May 26, the broking said. “Going ahead, a follow through move and a close above 24,100 will infuse further momentum and open upside towards 24,600 levels in the coming weeks. However, failure to close above 24,100 will lead to some consolidation in the range of 23,600-24,100 in the coming sessions,” the broking said, as reported by Good Returns.

Bajaj Broking expects the broader market structure to remain constructive and for investors to use any dips to gradually accumulate quality stocks.

The broking expects the Nifty to cross the levels of 24100 and then move towards the 24600 levels in the coming weeks. The support is seen around 23900-23800 and a strong immediate support can be found around 23500-23600.

Bank Nifty Outlook

Bank Nifty continued its consolidation after two sharp weeks of rally. This indicates that specific stocks are moving rather than a broad sell-off.

The index has risen almost 4800 points in the past 10 trading sessions and has seemingly taken some much-needed respite. In addition, the bullish case is supported by the 20-day EMA crossing over the 50-day EMA bullishly.

Bajaj Broking Research said, “We expect the index to head towards 58,300 and 59,000 levels in the coming weeks being the measuring implication of the recent four-week range breakout (52,700-55,500). Index sustaining above 55,500-56,000, will keep the short-term bias positive and any dips should be viewed as buying opportunities. Only a decisive breach below the 55,500-support level would negate the positive outlook,” as reported by Good Returns.

What investors should watch today?

Further market direction will be determined by Federal Reserve commentary, global equity movements, the crude oil market and institutional positioning. Nifty is well above the 24000 mark once again and the Gift Nifty is suggesting a firm opening; traders will look to see if the index can hold the 24100 resistance and gain strength to 24600.

(Disclaimer: This article is for informational purposes only and should not be considered investment advice. The views, opinions, and recommendations expressed herein are those of the respective experts. Readers are advised to consult a qualified financial advisor before making any investment decisions.)

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