Indian equity markets are predicted to maintain a cautious optimism in the upcoming week. Analysts believe this positive outlook is supported by reduced geopolitical tensions in West Asia, lower crude oil prices, and an improved global risk sentiment. Last week, the Nifty index surged by 390 points or 1.65%, closing at 24,013.10.
Similarly, the Sensex also saw a weekly gain of about 1.7%, while broader markets performed even better with gains exceeding 3%. This market rally was fueled by a more positive global sentiment following progress in US-Iran relations. The positive development led to a significant drop in crude oil prices, alleviating concerns about global inflation and supply disruptions.
The decline in crude oil prices is particularly advantageous for India due to its heavy reliance on energy imports. Analysts anticipate that this decrease will help alleviate inflationary pressures and the current account deficit. Moreover, it is expected to bolster the rupee, which appreciated nearly 1% against the US dollar last week.
Looking ahead, analysts foresee the 24,150-24,200 range as an immediate resistance level for the market. A sustained breakthrough above 24,200 could reinforce bullish sentiment and potentially trigger a new rally towards 24,500. Conversely, the 23,850-23,800 range is seen as crucial support, coinciding with the 50-day exponential moving average. A significant breach below 23,800 could escalate selling pressure, pushing the index towards 23,500.
Market participants will closely monitor developments in US-Iran relations and fluctuations in crude oil prices, as these factors continue to influence market sentiment. Additionally, the upcoming trading week will be shortened due to the Muharram holiday on June 26. Investors will also keep an eye on key macroeconomic indicators, including India’s May industrial production data, US personal consumption expenditure inflation data, and first-quarter US GDP growth figures. Analysts recommend a stock-specific approach with strict risk-management practices, while the broader market bias remains sideways to bullish.
