The Indian equity benchmarks recorded a third straight week of growth, attributed to a significant drop in crude oil prices to pre-Iran conflict levels and increased activity at the Strait of Hormuz. Nifty rose by 0.18% over the week, closing at 24,056, while Sensex climbed 109 points to 77,100, marking a 0.14% increase on the final trading day. The markets experienced mixed signals throughout the week, with mid-caps facing slight selling pressure despite overall resilience.
Easing geopolitical tensions due to progressing US-Iran discussions and optimism surrounding an India-US trade agreement bolstered investor confidence in the domestic markets. However, concerns about potential inflationary pressures and a slowdown in rural demand emerged, driven by uncertainties in monsoon distribution. The ongoing decline in crude prices, coupled with improvements in inflation and fiscal dynamics, offer the Reserve Bank of India more policy flexibility in the near future.
In terms of sectors, pharma and healthcare stocks outperformed, while private banks saw gains following the RBI’s clarification on the FCNR(B) deposit swap scheme. Conversely, metals suffered losses due to falling commodity prices, and consumer durables struggled amid demand worries. Notably, broader market indices diverged from the benchmarks, with Nifty Midcap100 declining by 1.15% and Nifty Smallcap100 edging up by 0.03% over the week.
Looking ahead, Nifty faces immediate resistance levels at 24,400 and 24,500, with support at 23,900 and 23,800. Bank Nifty’s support is anticipated in the 57,500–57,400 range, while resistance is expected at 58,900 and 59,000. As corporate earnings reports loom, market direction will be influenced by management insights on demand visibility, margins, and order flows. Investors are monitoring US economic data and domestic industrial production figures for market cues.
