The Indian stock market experienced a mixed week, with the BSE Sensex index falling 0.51% to 85,267.66 and the Nifty50 index declining 0.53% to 26,046.95. This marks the second consecutive week of losses, largely due to consistent outflows from Foreign Institutional Investors (FIIs) and a weakening rupee.
Despite the overall decline, some sectors performed well, including Nifty Metal index, which rose 2%, and Nifty Consumer Durables, which added 0.4%. On the other hand, Nifty Defence index shed 3%, while Nifty Media, Nifty PSU Bank, Nifty IT, and Nifty FMCG fell between 1-1.7%.
According to Vinod Nair, Head of Research at Geojit Investments, the market's performance was influenced by various factors, including the US Federal Reserve's policy decision, FII outflows, and uncertainty surrounding US-India trade negotiations. However, the market sentiment improved later in the week after the Fed announced a 25-bps rate cut, easing liquidity concerns and fuelling hopes of renewed FII inflows.
Looking ahead, the market is likely to maintain a positive bias but remain sensitive to rupee stability, FII flow trends, and clarity on trade agreements. Risks persist from currency fluctuations and global trade uncertainties, but improving earnings visibility and liquidity support provide a constructive backdrop and downside protection.
The BSE Small-cap index fell 0.4%, with some stocks like Refex Industries, Kothari Industrial Corporation, and Hubtown slipping between 12-23%. However, others like Fermenta Biotech, Stallion India Fluorochemicals, and Rolex Rings gained between 16-26%.
The Nifty formed a small bear candle with a long lower shadow on the weekly chart, indicating the emergence of sharp buying in the market from near the immediate supports. The underlying trend of Nifty continues to be positive, with the next upside levels to be watched around 26,300-26,400. Immediate support is placed at 25,900.
The volatility index INDIAVIX has eased to the 10 level, a zone that remains supportive for bullish sentiment. As long as the index holds above 25,700, it is likely to consolidate within the 25,700–26,325 range in the short term.
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