Over the past three weeks, Indian equity markets have shown signs of strong recovery, led by aggressive buying from Foreign Institutional Investors (FIIs). The Nifty 50 Index, in particular, saw a robust uptrend as FIIs pumped in nearly ₹25,000 crore into the cash segment. However, the momentum witnessed a partial reversal last week, with Institutional Investors (IIs) withdrawing ₹11,591 crore from Indian equities, thereby reducing May’s net FII inflow to ₹13,835 crore.
This pullback is largely being attributed to heightened global uncertainty. In a fresh development post-Friday market close, U.S. President Donald Trump proposed a hefty 50% tariff on goods imported from the European Union, effective June 1. This announcement has reignited concerns of a renewed trade war between two major global economies, casting a shadow over global market sentiment.
Technical Outlook: Nifty 50 and Bank Nifty
From a technical perspective, Nifty 50 is currently grappling with resistance in the 25,100–25,200 range. Despite the recent pause, market sentiment remains broadly positive, with traders and investors continuing to adopt a “buy-on-dips” approach. Analysts expect the index to trade within a 24,500–25,200 range this week. Crucially, the 24,500 level is seen as a pivotal support point—holding above this could open doors for a fresh rally towards 25,200. Conversely, a close below 24,500 might spark a further correction, with potential downside towards 24,000.
Bank Nifty, on the other hand, has shown a relatively range-bound performance, fluctuating between 53,000 and 56,000. Support is observed in the 52,500–53,000 zone, while the upper ceiling remains at 56,000. Despite the consolidation, the index continues to trade above its monthly support of 52,000, suggesting resilience amid volatility.
Broader Market Sentiment and Long-Term View
Both benchmark indices—Nifty 50 and Bank Nifty—have ended the week above their key monthly support levels of 23,500 and 52,000 respectively. This indicates underlying strength in the broader market, even as investors remain cautious amid evolving geopolitical and economic developments. Long-term support levels are placed at 21,700 for Nifty 50 and 50,500 for Bank Nifty, offering strong reference points for building fresh long positions during potential market corrections.
Stocks to Watch This Week
Market participants looking for stock-specific opportunities may consider the following recommendations:
- ICICI Prudential Life Insurance Company Ltd: Buy at ₹640 with a stop loss at ₹620; target price ₹670.
- Tata Consultancy Services Ltd (TCS): Buy at ₹3,508 with a stop loss at ₹3,475; target price ₹3,600.
- GAIL (India) Ltd: Buy at ₹191 with a stop loss at ₹184; target price ₹204.
As markets navigate through a mix of domestic resilience and global uncertainty, a cautious yet optimistic approach is expected to define investor sentiment in the near term.
