Sensex Jumped 3,077 Pts, Nifty Up 953 Pts In 5 Sessions: How Will Indian Market Perform In Week Ahead?

Indian stock market has witnessed sharp buying trend for five consecutive sessions, with Sensex hitting 77,000 mark and Nifty 50 crossing 23,400 pivotal levels. Slowdown in FIIs selling, cooking in inflation, and uptick in domestic fundamentals has turned investors sentiment bullish in Indian stocks. In the week ahead, key economic data such as Donald Trump's tariff plans, PMI data, GDP, retail sales and other major economies inflation data will sway sentiments. What will be the next Sensex and Nifty levels?

Last week on Friday, Sensex ended at 76,905.51, up by 557.45 points or 0.73%, while Nifty 50 surged by 159.75 points or 0.69% to end at 23,350.40. During this trading session, Sensex and Nifty touched level of 77,041.94 and 23,402.70 before correcting.

Market has been gaining since March 17. The last red zone for Sensex and Nifty was at 73,828.91 and 22,397.20 respectively. Since then, Sensex zoomed by 3,076.6 points and Nifty advanced by 953.2 points.

Several factors contributed to sharp recovery in Indian market.

As per Ajit Mishra - SVP, Research, Religare Broking Ltd, easing pressure from foreign institutional investors (FIIs), marked by positive flows in both cash and derivatives segments, provided much-needed stability. Additionally, crude oil prices and the dollar index remained at lower levels after a recent decline, supporting market sentiment.

Also, dovish signals from the US Federal Reserve regarding future rate cuts, coupled with reports of de-escalation in the Russia-Ukraine conflict, added to the optimism. The rally was broad-based, with all key sectors participating. Realty, energy, and pharma emerged as the top gainers, while midcap and smallcap indices surged between 7.7% and 8.6%, adding to the overall market buoyancy, Mishra explained.

What Will Impact the Market In The Upcoming Trading Week?

Key Factors To Watch Out:

According to Mishra, with no major domestic economic events scheduled, the focus will remain on the expiry of March derivatives contracts and FII activity. On the global front, the US markets will be closely watched, with tariff-related updates and GDP growth data expected to influence investor sentiment. Although US markets saw a temporary respite after a sharp decline, mixed signals suggest potential volatility in the coming sessions.

Along similar lines, SBI Securities said, that next week, in the absence of any major domestic triggers, global cues will be an important driving factor. US Feb'25 home sales data, 4QCY24 GDP and Personal Consumption Expenditure (PCE) reading for Feb'25 will be key data points to be tracked. The market will also start discounting the probable reciprocal tariffs expected to be imposed on various sectors (Auto, Pharma, Chemicals, Gems & Jewellery) by the US on 2nd April. Talking about crucial levels, the zone of 23130-23100 is likely to provide a cushion in case of any immediate decline. On the upside, it is likely to test the level of 23600, followed by 23800 in the short-term.

Technical Outlook:

On Nifty, Mishra said, the index's recent breakout from the 22,250-22,650 range has propelled it to a crucial resistance level around 23,400, where key moving averages (100-DEMA and 200-DEMA) are positioned. A decisive move beyond this level could set the stage for further gains towards the 23,800-24,100 zone. On the downside, the 22,750-23,000 range is expected to provide strong support in case of a pullback.

Further, Puneet Singhania, Director at Master Trust Group said, Nifty gained for all five sessions this week, rising 4.26% weekly and reaching a six-week high after the previous week's decline. The index decisively closed above the falling trendline, signalling a breakout and potential trend reversal in favour of the bulls. Additionally, Nifty ended above the 21-day and 55-day EMAs, making it favourable for a buy-on-dip strategy. In the near term, key support is at the 55-day EMA at 23,050, with a breach possibly triggering a decline toward 22,700. On the upside, resistance at 22,500 remains crucial, with a breakout potentially driving prices toward 22,800.

On Bank Nifty, Mishra said, the banking and financial sectors have played a pivotal role in the rally, with the banking index reclaiming major moving averages. A breakout above 50,800 in the banking index could drive further gains toward the 51,700-52,800 range, while 49,900 remains a crucial support level.

Singhania said Bank Nifty gained 5.27% this week, forming a strong Marubozu candle on the daily chart, signalling bullish momentum and a potential reversal from its 100-week EMA. The index closed at weekly highs and above the 21-day and 55-day EMAs, making it favourable for a buy-on-dip strategy. Key support is at the 55-day EMA around 49,500, and a drop below this could weaken the trend. On the upside, the next resistance is at 51,100, the 50% Fibonacci level. A breakout above this could push the index toward 51,800, indicating further strength in the bullish trend.

Investors Strategy?

Religare's expert advised traders are advised to adopt a "buy on dips" strategy, focusing on sectors that have demonstrated consistent strength. Banking, financials, metals, and energy stocks remain preferred picks, while selective opportunities can also be explored in PSU and auto stocks. Given the sharp rebound in broader markets, midcap and smallcap stocks may offer potential trading opportunities, though aggressive positioning should be avoided.

Overall, he said, market sentiment remains positive, but investors should remain cautious and closely monitor key technical levels and global cues for further direction.