The Indian stock market witnessed a sharp rebound after declining for six weeks straight, driven by positive global cues. Investor sentiment stayed upbeat on hopes of a temporary US–Iran ceasefire, though ongoing geopolitical tensions limited the momentum as the week advanced. A steady domestic macroeconomic environment further underpinned the rally, with broader markets outperforming the headline indices.
Despite heightened volatility—featuring sharp mid-week surges followed by profit-taking—the overall trend remained upward. As a result, both benchmark indices, the Nifty and Sensex, gained around 6% to close near the week’s highs at 24,050.60 and 77,550.25, respectively.
Stock market outlook for next week
Ponmudi R, CEO of Enrich Money, believes that the Indian stock market in the week ahead are expected to stay volatile, with movements largely influenced by news developments, particularly the outcome of the US–Iran talks over the weekend. The progress of these negotiations will play a key role in shaping global risk appetite and trends in crude oil prices.
“The shift in foreign investor activity during the last session points to cautious optimism about the possibility of a truce. However, the continuation of such inflows will hinge on the clarity and durability of diplomatic outcomes. Any renewed escalation in tensions or a sharp rise in oil prices could bring back downside risks. On the other hand, sustained easing in crude prices, coupled with supportive global cues, may trigger short-covering and provide near-term support to the markets,” Ponmudi said.
Market trading strategy for next week
According to Ajit Mishra – SVP, Research, Religare Broking, investors should maintain a balanced and selective approach, given the improving momentum but persistent global uncertainties. Portfolio allocation should remain tilted towards fundamentally strong large-cap stocks, while selectively participating in broader market opportunities, he said.
Mishra further opined that while most sectors are participating in the rally, rate-sensitive segments and select cyclical themes may continue to outperform, supported by improving sentiment and global cues. However, caution is warranted in sectors exposed to input cost pressures amid elevated crude prices.
“Traders should remain agile, avoid excessive leverage, and focus on disciplined risk management. With volatility expected to remain elevated, adopting a hedged strategy and focusing on stock- specific opportunities will be crucial,” Mishra said.
Key technical levels to watch for in the coming week –
Sensex
According to Ponmudi, Sensex is consolidating within the 77,300–77,600 range, indicating stability following the recent recovery. Immediate resistance is placed around 78,000–78,400, with the 78,000 zone acting as a key previous support now turned resistance, making it a strong supply zone.
“A sustained move above this range is necessary to improve overall sentiment and can potentially open the path towards fresh lifetime highs. On the downside, support is seen near 76,700–76,500, which is expected to act as a strong cushion. While the structure is gradually improving, it still requires confirmation through sustained buying at higher levels,” he said.
Nifty 50
On the Nifty 50 outlook, Mishra said that the index has witnessed a swift recovery and has retraced nearly four weeks of losses, indicating potential for further upside towards the 24,300–24,700 zone.
“A moderation in the volatility index, India VIX, now around 19, is adding to investor comfort. Traders should maintain a positive yet cautious stance, with the index needing to hold decisively above the key level of 23,500 (20 DEMA),” he added.
Bank Nifty
On the Bank Nifty outlook, Mishra further added that the banking index also participated in the upmove, gaining around 8.5%, with contributions from both private and PSU banks.
“Going forward, the index may retest its long-term moving average (200 DEMA) near 56,700, followed by a move towards 57,800. On the downside, the short-term moving average (20 DEMA) will act as the first line of defence at 54,300, followed by support near 53,000,” he said.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.
