Indian equity benchmarks posted notable gains during the week as sentiments improved over easing crude oil prices and reports of indirect US–Iran talks
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MUMBAI — Indian equity benchmarks posted notable gains during the week as sentiments improved over easing crude oil prices and reports of indirect US–Iran talks.
Nifty gained 0.32 per cent during the week and added 0.27 per cent on the last trading day to reach 23,719. At close, Sensex was up 231 points or 0.31 per cent at 75,415. It advanced 0.24 per cent during the week.
"Despite the rebound, investors largely remained cautious, with limited conviction at higher levels continuing to cap upside momentum," an analyst said.
The IT sector stood out as a clear outperformer, benefiting from attractive valuations following the recent correction.
Realty, cement, and private banks also held up while FMCG and consumer durables underperformed as concerns of WPI pass-through weighed on margins.
Midcap indices outperformed benchmark indices, as Nifty Midcap100 added 1.36 per cent, while Nifty Smallcap100 gained 0.41 per cent during the week.
The rupee found much-needed support as crude prices exhibited a modest pullback over persistent efforts to ease Middle East tensions.
However, fears of tightening monetary policy amidst expectations of higher input inflation provided an upward push for domestic bond yields, analysts said.
The US 30-year Treasury yield climbed to its highest level since 2007 during the week, reflecting growing concerns around sticky inflation, elevated energy prices and rising macroeconomic uncertainty.
It reinforced concerns that higher-for-longer interest rates could continue to pressure global liquidity conditions and risk assets.
Nifty 50 is expected to see the 23,800–24,000 region as a strong resistance zone and the 23,400–23,300 region remains a crucial support area, market participants said.
In Bank Nifty, immediate resistance is placed around the 54,200 level and the 53,600–53,500 region continues to act as an immediate support zone.
Foreign institutional investors (FIIs) largely remained net sellers, with cumulative outflows at around Rs 7,570 crore, a market participant said.
Investors remain keen on cues from India's April IIP print, which will offer clues on whether recent manufacturing softness is a passing or persistent concern.
The RBI's June policy decision and the US core PCE data are also key triggers for the market. A higher PCE print would push back expectations of US Fed rate cuts, limiting the prospect of meaningful FII inflows into emerging markets.