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Below the Quote on Weekly Note by Mr. Ajit Mishra - SVP, Research, Religare Broking Ltd

Markets experienced another week of volatility, but managed to close with marginal gains, driven by mixed global and domestic factors. The week began on a weak note amid concerns over a potential tariff war. However, sentiment improved as the U.S. President announced a temporary pause on tariffs for Mexico and Canada, easing global trade worries. 

Rate-sensitive sectors such as banking, financials, and auto led the initial recovery, supported by expectations of a rate cut by the Monetary Policy Committee (MPC). Further strength was witnessed in metal, IT, and pharma stocks, which contributed to the overall positive momentum. On Friday, the MPC delivered a widely anticipated repo rate cut, but the move failed to trigger a significant market reaction. 

Despite the gains, several factors kept the upside in check, including foreign fund outflows, rupee depreciation, and mixed corporate earnings. By the end of the week, the benchmark indices closed slightly higher, with the Nifty settling at 23,559.90 and the Sensex at 77,860.19. The broader market also saw volatile swings and ended on a flat note. 

Looking ahead, investor focus will shift to earnings and upcoming macroeconomic data, including the Index of Industrial Production (IIP), Consumer Price Index (CPI) inflation, and Wholesale Price Index (WPI) inflation, scheduled during the week. Additionally, movements in the rupee, foreign fund flows, and global market trends, particularly from the U.S., will be closely monitored. 

From a technical standpoint, Nifty successfully held its immediate support i.e. 23,400 at the 20-day exponential moving average (DEMA) on Friday. The recent swing low of 23,200 remains a crucial support level to sustain a positive positional bias, while the 23,900 mark serves as a major resistance. A breakout above this level could drive the index towards 24,200. 

Amid these developments, investors are advised to focus on stock selection based on sectoral trends. Most key sectors, except FMCG, are showing rotational participation. However, caution is advised in the midcap and smallcap segments, as broader market volatility remains a concern.

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