The Indian equity benchmarks rebounded this week after two weeks of losses, driven by investor optimism over a potential US-Iran peace agreement and a drop in Brent crude prices. Nifty rose by 1.10% for the week, closing at 23,622, while Sensex surged by 2.30% to reach 75,527, marking a gain of 1.99% on the last trading day. Analysts noted the structural resilience of Indian equities amidst global challenges and uncertainties surrounding the US Fed’s policy direction.
Large-cap stocks outperformed the broader markets, while profit booking was observed in the mid- and small-cap segments following a strong rally. Despite a range-bound trading pattern with a slight negative bias, Indian equities saw a modest recovery towards the end of the week. Financials led the sectoral performance, supported by private banks and a defensive shift from high-beta growth segments, while FMCG stocks advanced on expectations of sustained pricing strength.
The IT sector continued its decline, and metal stocks faced pressure from subdued commodity prices amid lower demand forecasts from China. Market participants highlighted the potential impact of a slowdown in FII selling or clarity on the Federal Reserve’s policy stance as triggers for domestic capital inflows. FII selling remained a challenge for Indian equities, totaling around Rs 15,300 crore for the week, although the pace of outflows slowed in the latter part of the period.
On the other hand, domestic institutional investors (DIIs) remained active buyers, with net inflows of approximately Rs 24,000 crore. Broad market indices mirrored the benchmark indices’ performance, with Nifty Midcap100 gaining 0.98% and Nifty Smallcap100 rising by 0.48% during the week. Key resistance and support levels for Nifty 50 and Bank Nifty were identified by market participants, with a focus on upcoming macroeconomic data releases and the US Fed decision.
