Indian equities are set for a strong start on March 20, building on their winning streak for a fourth straight session. Global cues remain supportive after the Federal Reserve reaffirmed its plan for two rate cuts in 2025. The GIFT Nifty hints at a bullish opening, with the benchmark index eyeing a breakout past the 23,000 mark.

The Federal Reserve held interest rates steady at 4.25-4.50 percent, as widely expected, but flagged rising economic uncertainty, particularly around inflation risks linked to Trump’s proposed tariffs.

In response, policymakers raised their year-end core inflation forecast to 2.8 percent from 2.5 percent and lowered 2025 GDP growth projections to 1.7 percent from 2.1 percent. The unemployment estimate also edged higher to 4.4 percent. Fed Chair Jerome Powell acknowledged the difficulty in quantifying tariffs' impact on inflation but noted that surveys suggest they are already pushing inflation expectations higher.

On March 19, Nifty and Sensex rose for a third straight session, driven by strong buying in banking, oil & gas, and metal stocks. However, losses in FMCG and IT stocks limited the rally. Midcaps and smallcaps outshone, with the Midcap 100 and Smallcap 100 indices jumping 2.6 percent and 2.43 percent, respectively, extending their strong run.

"The recent market recovery is not just a one-day movement but has been supported by key factors such as a decline in the dollar index and short-covering by foreign institutional investors (FIIs). The dollar index has corrected from 110 to around 103, which is positive for equities," Ruchit Jain, Vice President of Technical Research at Motilal Oswal, said.

Among sectoral indices, Nifty PSU Bank, Metals and Oil and Gas, and Realty were the top performers with gains of 2, 1.26, 1.04, and 2.43 percent, respectively.  Weakness in FMCG and IT stocks weighed on sentiment, with the latter taking a sharp hit on March 19. Indian IT stocks tumbled as recession fears in the US and uncertainty over interest rates spooked investors. The Nifty IT index ended 1.08 mirroring global market weakness and concerns over slowing demand for IT services.

Here are the key levels to watch out for today

Nifty extended its gains on March 19, nearly touching the 23,000 mark during intraday trade as sentiment improved. The index ended near 22,900, with expectations of further upside. A decisive break above 23,000 could trigger a fresh breakout from the descending channel pattern, paving the way for higher targets of 23,800 and 24,200. Market breadth remained strong, with an advance-decline ratio of 5:1 at the close. For the day, Nifty’s support is seen at 22,800, while resistance stands at 23,200," domestic Brokerage Prabhudas Lilladher said.

BankNifty maintained its strong momentum, decisively moving past the 50-EMA zone of 49,250 and closing near 49,700. With support from frontline banking stocks, the index is poised for further gains, targeting 50,900 (200-period MA) and 51,800 in the coming sessions. The daily range for BankNifty is expected to be between 49,300 and 50,500.

The Nifty Put-Call Ratio (PCR), a key gauge of market sentiment, dropped to 1.2 on March 19 from 1.29 in the previous session. A PCR above 0.7 or exceeding 1 suggests traders are selling more Put options than Calls, signaling a strengthening bullish sentiment. Conversely, if the ratio dips below 0.7 or near 0.5, it indicates higher selling in Calls than Puts, reflecting a bearish outlook.

The India VIX, the barometer to assess market anxiety, rose 0.66 percent to 13.3 but stayed in the lower range and below key moving averages, keeping market volatility subdued and supporting bullish sentiment.