Quote on Weekly Note June 28 by Mr. Ajit Mishra, SVP, Research, Religare Broking Ltd
Below the Quote on Weekly Note June 28 by Mr. Ajit Mishra, SVP, Research, Religare Broking Ltd
Markets Post Weekly Gains Amid Global Calm and FII Inflows
Markets finally ended their five-week-long consolidation phase, driven by improving global sentiment, easing geopolitical concerns, and noticeable buying by foreign institutional investors (FIIs) in the latter part of the week. After a cautious start, indices gained traction midweek as tensions between Iran and Israel appeared to ease, and global risk appetite returned. Consequently, the benchmark indices Nifty and Sensex closed near their weekly highs at 25,637.80 and 84,058.90, respectively.
Key Market Drivers
The rally was underpinned by a combination of easing Middle East tensions and a strong rebound in FII inflows. The fragile truce between Iran and Israel held throughout the week, calming geopolitical nerves and boosting investor confidence.
On the domestic front, progress in the monsoon, subdued crude oil prices, and stable macroeconomic indicators supported the bullish undertone. FII inflows accelerated, with over ?12,000 crore infused in a single day, further strengthening market sentiment.
Sectoral Snapshot
A majority of sectors participated in the upmove, with metals leading the gains, followed by financials, energy, and banking. IT stocks also witnessed a recovery and ended flat, supported by bargain hunting and favorable global cues.
In contrast, the realty pack saw profit booking amid the prevailing consolidation and ended marginally lower.
Interestingly, broader indices attracted significant buying interest, reflecting a risk-on sentiment, and gained in the range of 2.4% to 4.3% over the week.
Key Events to Watch
Looking ahead, global cues will continue to drive market direction. Despite improved sentiment, caution persists regarding potential tariff escalations, with U.S. tariffs scheduled to resume from July 9 and updates on trade agreements will remain in focus. The U.S. President recently announced on a social media platform the signing of a deal with China and indicated a potential deal with India, although details remain scant. Further clarity on these developments will be closely monitored by the market.
Domestically, high-frequency data such as IIP and PMI figures will be in focus, along with monsoon progress and FII activity, to gauge short-term market trends.
Technical Outlook
With the Nifty ending its consolidation phase through a decisive breakout, we now expect a gradual move toward the all-time high i.e. 26,277.35. However, the gap area around 25,800 could cause a temporary pause. In the event of a pullback, the 24,800–25,200 zone—which previously acted as resistance—is likely to offer strong support?
The banking index has resumed its bullish trajectory, supported by renewed buying interest in major private sector banks and intermittent strength in PSU banks. We anticipate the index to gradually advance toward the upper trendline of the broadening formation around 58,200, followed by a potential move to the psychological mark of 60,000.
Strategy Ahead
Participants should continue to adopt a “buy-on-dips” approach, with a focus on selective stock picking. Among the key sectors, we maintain our preference for rate-sensitive segments such as banking, financials, auto, and real estate, while advising a selective approach toward other sectors.
Similarly, midcaps and smallcaps should be approached selectively due to their recent sharp run-up and valuation concerns in certain segments.
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