Stock Market Outlook Next Week, May 25 to 29: Sensex, Nifty May Remain Volatile Amid Rising Crude, FII Selling

Indian stock markets ended the week on a cautiously positive note despite continued global uncertainty, persistent foreign fund outflows and pressure from rising crude oil prices. Benchmark indices managed to post marginal gains during the week ended May 22, 2026, supported largely by strong domestic institutional buying and selective sectoral strength in banking, FMCG and IT stocks.

Stock Market Outlook Next Week from 25 to 29 May 2026: Sensex, Nifty Weekly Prediction

The Nifty 50 closed the week at 23,719, while the BSE Sensex settled at 75,415, registering weekly gains of nearly 0.2-0.3%. Market sentiment remained volatile throughout the week as investors closely tracked developments surrounding the ongoing US-Iran conflict, rising oil prices and weakness in the Indian rupee.

According to experts, the broader market mood reflected a balance between aggressive domestic institutional buying and continued selling by foreign institutional investors.

The ongoing geopolitical tensions between the United States and Iran remained one of the biggest drivers for global markets. Crude oil prices have surged more than 55% since the conflict began on February 28 and continued to trade in the range of 104 dollars to 114 dollars per barrel during the week. Rising crude prices remain a major concern for India as they increase pressure on inflation, the current account deficit and rupee stability.

Although a temporary pause in fresh Iran-related military action by former US President Donald Trump briefly improved market sentiment mid-week, gains remained short-lived as uncertainty around peace negotiations continued to weigh on investor confidence.

Global Cues, Weak Rupee and FII Selling Keep Markets Under Pressure

Adding to global concerns, Moody's downgraded the US sovereign credit rating to Aa1 during the week. The move pushed the US Dollar Index lower towards the 100.60 mark, while US 10-year bond yields remained elevated near 4.63%, limiting risk appetite across emerging markets, including India.

On the domestic front, the Indian rupee touched a fresh all-time low of 96.89 against the US dollar on May 20. The currency has now weakened nearly 6% since late February, underperforming several other emerging market peers.

Analysts believe the simultaneous deterioration in India's current account due to higher crude imports and continued capital outflows from foreign investors has restricted the Reserve Bank of India's ability to aggressively defend the rupee.

Foreign portfolio investor outflows in 2026 have already crossed Rs 2.19 lakh crore. However, strong domestic institutional investor participation helped cushion the market from deeper losses. On Friday alone, DII buying stood at Rs 6,003 crore compared with FII selling worth Rs 4,440 crore.

Nifty Outlook Next Week, May 25 to 29, 2026: Check Technical Outlook by Expert

Despite the recovery seen during the week, technical indicators suggest that the broader market trend remains cautious.

"Nifty 50 ended the week with a modest gain of 0.32% after witnessing weakness in the previous week. Despite the recovery, the index continues to trade below both the 21-day and 55-day EMA on the daily as well as weekly charts, indicating that the broader trend remains weak. However, the 23,300 zone has emerged as a strong support area, and as long as the index holds above this level, the possibility of base formation remains intact," said Dr. Ravi Singh, Chief Research Officer at Master Capital Services Ltd.

Dr. Ravi Singh added that recent consolidation could help markets stabilise at lower levels.

"The consolidation seen over the last two weeks is also helping the market build stability at lower levels. On the upside, 23,850 remains a key resistance level, and a sustained move above it could trigger further upside momentum towards the 24,200 mark in the near term."

Bank Nifty Weekly Outlook: Recovery Seen but Caution Persists

Bank Nifty also witnessed recovery during the week and closed higher after recent declines. However, analysts believe the banking index still remains vulnerable near key resistance levels.

"Bank Nifty showed signs of recovery this week and managed to close on a strong note after last week's decline. Despite the rebound, the index is still trading below both the 21-day and 55-day EMA, which suggests that the overall trend remains slightly cautious."

"The 54,500 zone is acting as an important resistance level, and a sustained move above it could open the door for further upside towards 55,400, where the 55-day EMA is also placed. On the downside, immediate support is seen near 53,500, while the 52,800-53,000 zone remains a strong support area. As long as Bank Nifty stays below key resistance levels, the broader approach continues to favor a sell-on-rise strategy in the near term."

Market participants are now expected to closely monitor crude oil movements, rupee trends, global bond yields, foreign fund flows and geopolitical developments during the week of May 25 to 29, as these factors are likely to continue driving volatility in Indian equities.

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