Indian stock markets are poised for an interesting trading session on September 2, 2025, with both the Nifty 50 and the Sensex influenced by a blend of domestic and global factors. After a positive close on the first day of the month, snapping a three-day losing streak, investors are cautiously optimistic, keeping a close watch on key support and resistance levels.

Global Cues and Early Indications:

Early signals suggest a muted start for the Indian benchmark indices. GIFT Nifty futures are trading with a slight premium, hinting at a flat opening. Mixed cues from U.S. and European markets may provide limited support, particularly to financials and large-cap stocks. U.S. markets experienced modest declines, while European markets saw slight gains.

Key Levels to Watch:

For the Nifty 50, immediate resistance is placed in the 24,700-24,740 range. A sustained breakout above 24,740 could lead to a further upside towards 24,900 and potentially 25,000. On the downside, support lies between 24,500 and 24,470; a breach of this level might trigger a fall towards 24,200. Some analysts suggest a further support level at 24,337.

The Sensex is expected to find support around 80,000. As long as it trades above this level, the pullback formation is likely to continue, potentially bouncing back to 80,500 or even 80,800. A fall below 80,000 may prompt traders to exit long positions.

Bank Nifty's immediate resistance is between 54,300 and 54,400, with a breakout potentially pushing the index towards 54,900. Strong support exists between 53,500 and 53,600, aligning with the 200-day exponential moving average (EMA). A breach of the 53,500 support level could see Bank Nifty retesting its 200-SMA, which is around 52,900.

Market Dynamics and Sentiment:

On September 1, the Nifty 50 closed at 24,625.05, a gain of 198.20 points or 0.81%, driven by broad-based gains across most constituents. The Sensex rose 554.84 points, or 0.70%, to close at 80,364.49. Market sentiment was overwhelmingly positive, with advances outpacing declines. Strong economic data, notably GDP growth of 7.8% in Q1 FY26, coupled with positive global cues regarding interest rates, fueled investor confidence.

However, Foreign Portfolio Investors (FIIs) have been net sellers for the sixth consecutive session. On September 1, FIIs sold stocks worth approximately ₹1,703.73 crore. Conversely, Domestic Institutional Investors (DIIs) have remained net buyers, cushioning the declines. On September 1, DIIs bought stocks worth ₹4,344.90 crore.

Expert Opinions and Technical Analysis:

According to market expert Lakshmi Kant Shukla, the Nifty has shown a positive turnaround, rebounding from the psychological support level of 24,500. This resilience, coupled with the index surpassing its previous day's high, indicates a shift in market sentiment. Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, notes that the Nifty is approaching a key resistance zone between 24,710 and 24,740.

Analysts at Bajaj Broking suggest that Nifty holding above 24,400 will lead to consolidation in the 24,400-24,900 range. Shrikant Chouhan, Head of Equity Research at Kotak Securities, believes that as long as the Sensex trades above 80,000, the pullback formation is likely to continue.

Trading Strategy and Outlook:

Given the mixed signals, a range-bound opening is likely. Trading may remain within a narrow range unless fresh domestic or global triggers emerge. The 24,600-24,700 range will be crucial for Nifty's near-term movement, with a decisive move on either side likely to set the next direction.

Caution is advised, considering persistent FII selling. Investors should monitor key resistance levels and support zones, being prepared for potential profit booking if the Nifty fails to hold 24,500. Sector-specific opportunities may arise in Auto and IT, while Private Banks and IT may continue to underperform.