Stock market weekly wrap: Sensex, Nifty 50 rallied over 4.5%; What to expect from Indian stock market next week?

Indian stock market: The Indian stock market recently experienced its strongest weekly rally in four years, fueled by a reversal in foreign investor outflows and optimism over potential progress in US-Japan trade talks regarding mutual tariffs.

Domestic equity benchmarks, Sensex and Nifty 50, climbed 2% in the previous session, marking their fourth consecutive day of gains during the holiday-shortened week. The 30-stock BSE Sensex surged by 1,508.91 points, or 1.96%, surpassing the 78,000 mark and closing at 78,553.20.

“Markets witnessed a robust recovery and surged over 4.5% in the holiday-shortened week, driven by favorable cues from both domestic and global fronts. The benchmark indices opened with a sharp gap and built further on the gains in subsequent sessions. As a result, both Nifty and Sensex settled near the week’s high, closing at 23,851.65 and 78,553.20 respectively,” said Ajit Mishra – SVP, Research, Religare Broking Ltd, in a note.

Key market drivers for next week

The market rally was mainly driven by optimism over the postponement of tariffs and newly announced exemptions on certain products, sparking hopes for possible negotiations that might ease the strain on global trade.

As the week progressed, market participants responded positively to a slew of favorable developments, including updates on a normal monsoon, easing retail inflation—which raised hopes for potential policy rate cuts—and the absence of any major negative surprises from global markets.

All key sectors contributed to the market's upward momentum, with realty, banking, and financial stocks leading the gains. Other sectors also recorded solid performances. The broader indices kept pace with the benchmarks, each climbing over 4%, underscoring the widespread strength of the rally.

Key events to watch out next week

In the week ahead, investor attention will be centered on the earnings announcements from several marquee companies like HDFC Bank, and ICICI Bank. Other notable companies set to release their quarterly results include HCL Technologies, Axis Bank, Hindustan Unilever, and Maruti.

On the derivatives side, the expiry of April series contracts could contribute to heightened market volatility. Globally, developments surrounding tariffs and their potential effects on international markets will also be closely watched.

Technical Outlook for Nifty next week

According to Mishra of Religare Broking, Nifty has been trading within a broad range of 21,700–23,800 over the past two months technically and has now reached the upper end of this band. Moreover, it has reclaimed key moving averages—the 100 and 200-day EMAs. Going forward, the prevailing positive momentum is expected to continue, with a potential upside towards the 24,250–24,600 zone. In case of a dip, the 23,000–23,300 zone is likely to act as a support.

He further added that a sharp decline in the volatility index (India VIX) also signals a reduction in market fear after recent choppiness. Among the key sectors, the continued strength in the banking index has been crucial. It is now on the verge of hitting a new record high. The earnings of heavyweights like HDFC Bank and ICICI Bank are expected to provide important cues for the next market move. On the higher side, the index could target the 55,000–57,000 zone, considering the consolidation phase over the last nine months. In case of any dip, the 51,900–53,400 zone is expected to offer strong support.

What should be your market trading strategy?

Mishra recommends investors to continue with ‘buying on dips’ strategy Nifty breaches the 23,000 mark.

“With signals pointing to a continuation of the current recovery, a “buy on dips” approach is advisable until Nifty breaches the 23,000 mark. Sector-wise, rate-sensitive segments such as banking, financials, auto, and realty continue to be preferred and advised to be selective in other sectors. Participation from the broader market is also visible, further strengthening the bullish sentiment however focus should be on fundamentally sound stocks, especially with earnings season underway,” he added.

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.