The Indian equity benchmarks saw a fourth consecutive week of gains, driven by a sustained decline in crude oil prices and optimism about a favorable global interest rate environment. Nifty rose by 0.89% over the week, reaching 24,270 with a 0.39% increase on the last trading day. Sensex closed 261 points higher, up by 0.34% at 77,763, marking a 0.86% gain for the week.
Domestic markets transitioned from cautious to optimistic sentiments during the week. Initially, there was profit-booking amid uncertainties related to the US-Iran peace deal, subdued expectations for the upcoming earnings season, and a slow start to the monsoon. However, easing tensions in the Strait of Hormuz and dovish comments from the Fed Chair, along with weaker US labor data, boosted expectations of a more accommodative global interest rate scenario.
Analysts noted that positive sentiments were further fueled by optimism surrounding the India-Japan summit, with expectations of progress in trade, defense, semiconductor collaboration, AI initiatives, and a proposed rupee-yen settlement framework. In terms of sectors, real estate, pharma, and healthcare stocks performed well, while PSU banks and energy sectors lagged. The IT sector witnessed a significant rebound, driven by short covering and growing interest in Indian IT firms’ role in enterprise AI adoption.
The broader market indices closely mirrored the benchmark indices’ performance, with Nifty Midcap100 rising by 0.64% and Nifty Smallcap100 surging by 2.05% during the week. Analysts highlighted that Nifty’s immediate resistance levels are at 24,400, with 24,200 serving as immediate support, followed by 24,000. For Bank Nifty, support is expected in the 57,600–57,500 range, while resistance is seen at 58,200–58,300.
Investor focus remains on various factors including US FOMC minutes, domestic earnings reports, monsoon progress, credit growth trends, and trade talks with Japan, the UK, and the US. Despite existing risks like downward revisions in earnings growth estimates and monsoon-related inflation worries, market participants believe that much of the visible uncertainty has been factored in, allowing room for a positive outlook on incremental developments.
