Indian stock market: The Sensex jumped 0.52% last week to 78,499.17, while the Nifty gained 0.77% to 24,570.65.
Indian stock market: Despite high volatility, Indian markets closed the week with moderate gains as investors weighed the implementation of the new Closing Auction Session (CAS) framework for F&O stocks, the Reserve Bank of India’s monetary policy decision, and ongoing geopolitical uncertainties.
The Sensex jumped 0.52% this week to conclude at 78,499.17, while the Nifty gained 0.77% to 24,570.65. Broader markets outperformed the benchmark indexes, with the midcap and smallcap indices rising 0.81% and 2.61%, respectively, demonstrating that stock-specific buying interest extends beyond large-cap companies.
Stock market forecast for next week
According to Vinod Nair, Head of Research at Geojit Investments Limited, investors will closely watch upcoming US labor market and inflation statistics for more clarity on the Fed’s policy trajectory. Domestically, CPI and WPI inflation rates, as well as credit growth trends, will provide valuable insights into India’s growth-inflation dynamics.
“After an initially tumultuous start caused by the implementation of the new F&O Closing Auction Session (CAS), markets stabilized as players adjusted to the amended framework. Sentiment improved significantly as crude oil prices fell sharply, contributing to a stronger macroeconomic outlook and supporting predictions of lower inflationary pressures. Globally, softer labor market indicators lessened the possibility of a near-term Fed rate hike, resulting in a reduction of US bond yields and a weaker dollar. “This, combined with sustained safe-haven demand ahead of key US economic data releases, provided additional support to gold prices,” Nair stated.
Stock Market Trading Strategy
Ajit Mishra, SVP, Research at Religare Brokerage, feels that investors would stay cautious as geopolitical issues in West Asia evolve and crude oil prices fluctuate.
“Stock selection is projected to be a major theme throughout the earnings season. Investors should continue to look for companies with great earnings visibility, stable balance sheets, and rising relative strength. Maintaining disciplined position size and careful risk management will be critical, given the possibility of increased volatility caused by geopolitical developments, macroeconomic data releases, and earnings-related reactions,” Mishra stated.
Watch out for key critical levels in the Sensex next week.
The Sensex stayed upward, reflecting the broader market, completing the week safely over the 78,000 mark. The 78,800-79,000 sector remains the immediate resistance zone. A sustained breakout above this zone could bolster the rebound and pave the road to the 79,300-79,700 level.
On the Sensex forecast, Ponmudi R, CEO of Enrich Money, stated, “On the downside, the 77,300-77,200 zone remains the immediate support area, followed by the 77,000 psychological level. Holding above these levels will be critical to maintaining the strengthening technical structure, while a significant fall below 77,000 may result in renewed selling pressure. Overall, the near-term technical view is positive, with continued purchasing above the immediate resistance zones needed to confirm further higher.”
Nifty 50
According to Mishra of Religare Brokerage, the Nifty 50 remained volatile this week but remained above the critical breakout zone of 24,350-24,500, indicating a positive trend despite occasional profit booking. A sustained hold above this zone is expected to maintain the bullish structure. However, a convincing break below 24,350 could result in additional profit booking toward the 24,100 support zone.
On the upside, the 24,800-25,000 price range remains the immediate resistance. A sustained breach above this range might extend the current rise to the 25,200 mark,” he stated.
The Bank Nifty experienced consolidation this week due to selling in major financial companies, but remains in a positive medium-term trend.
On the Bank Nifty forecast, he added, “Immediate support is projected between 56,500 and 57,100, with substantial resistance around 58,700. A sustained move above this barrier might rekindle momentum and open the path for an advance to the 59,600 level.”
