Indian stock market closed May 2025 on a bullish note with Nifty surpassing Sensex in performance. In the first week of June, the market will brace for RBI's policy outcomes which will be announced on June 6, coupled with monthly sales, and operational and production data of automobile, metals, and mining companies. Banking and financial stocks will be in focus as the expectation of a 25 bps rate cut from MPC is on cards. Additionally, Q4 results and global trends will further contribute to the sentiment.
Sensex, Nifty:
The 30-scrip benchmark closed at 81,451.01 on March 31, with its weekly performance down by 980.53 points or 1.2%. Overall, in May, Sensex gained by 949.02% or 1.18%.
Meanwhile, Nifty 50 closed at 24,750.70, down by 288.65 points or 1.2% on week-on-week basis. In May, Nifty outperformed its counterpart Sensex with the upside of nearly 2% or 438 points.
Both foreign and domestic investors lifted the benchmarks with strong inflows. Foreign institutional investors (FIIs) made their strongest buying or 2025 in May to the tune of Rs 11,773.25 crore in Indian equities. Also, domestic institutional investors (DIIs) pumped in Rs 67,642.34 crore overall in May 2025, the second best buying in 2025, after inflow of Rs 86,591.80 crore in January 2025.
What To Expect Next Week?
Between June 2-6, Ajit Mishra - SVP, Research, Religare Broking said, all eyes will be on the outcome of the RBI's Monetary Policy Committee (MPC) meeting scheduled for June 6. The central bank's stance on the rate trajectory, especially amid mixed macroeconomic signals, will be critical in shaping market direction. Additionally, with the new month beginning, participants will track high-frequency data including auto sales numbers and other economic indicators. Updates on the progress of the monsoon and the trend in foreign institutional investor (FII) flows will also be closely monitored.
Additionally, Mishra added, globally, developments in the U.S. bond market and any updates regarding ongoing trade negotiations will continue to influence investor sentiment.
Sensex, Nifty Weekly Outlook For June 2-6:
According to Vinod Nair, Head of Research, Geojit Investments, mid-cap and small caps have exhibited resilience on the back of better-than-expected results, while large caps have underperformed due to lacklustre blue-chip earnings. Nifty PSU Bank and Nifty Realty outperformed the broader indices on expectations of a rate cut. The domestic economic indicators are favourable, like a better monsoon forecast, a benign inflation trajectory, and pleasant Q4 GDP growth of 7.4%, which may protect the downside.
He added, the market is pricing in a 25bps cut, which will improve the outlook for rate-sensitive sectors. The positive macroeconomic scripts can boost investor sentiments, but stability in the broader market will be contingent on strong earnings growth and receding trade tensions."
Technical Outlook:
As per Puneet Singhania, Director at Master Trust Group, Nifty concluded its second consecutive week in the red, trading below the key psychological mark of 25,000. However, the index continues to sustain above its 21-day EMA, which is acting as a critical dynamic support level. The index is still holding above key moving averages, supporting the ongoing uptrend. RSI is also trading above 14-day SMA, currently trading at 59. Strong support lies around 24500, a previously tested demand zone. If this level breaks, Nifty may drift lower toward 24200. On the upside, resistance is seen at 25000. A decisive move above this level could lead to a rally toward 25300. Positional traders can look to buy on dips near support.
Also, the expert said, Bank Nifty traded with high volatility throughout the week but managed to end positive, showing resilience near key support levels. The index took support near its 21-day EMA and has consistently traded above this level, which is currently near the 55000 mark. The index is currently at the upper edge of the trading range, showing strength. Key support is placed at 55000 and 54500, offering a good zone for dip buying. On the upside, 56100 is a key resistance. A sustained move above this level could trigger a sharp rally toward 57000. Overall, the setup remains positive, and traders can look to buy on dips.
In Religare's analyst's opinion, Nifty is expected to soon make a directional move. Holding above the 20-day exponential moving average (20-DEMA), currently around 24,600, will be essential to maintain a positive tone. A decisive breach of this level could trigger further profit-booking, dragging the index down toward the 24,200 mark. Conversely, a strong close above 25,200 could rekindle bullish momentum and open the path toward the 25,600+ zone.
"We continue to believe that the banking index holds the key to unlocking market momentum. It has been trading within a narrow range for over a month while sustaining above its short-term support at 55,000 (20-DEMA). A breakout above 56,000 could act as a catalyst, propelling the index toward the 57,500 level," Mishra said for Bank Nifty.
What Should Investors Do?
The expert has maintained constructive view of the markets and recommends looking for buying opportunities unless the Nifty decisively breaks below the 24,600 mark. Mishra added, "Within sectors, banking and financial services remain our top picks, while FMCG and IT are expected to trade subdued. With the broader market showing resilience, investors should continue focusing on fundamentally strong stocks that offer a favorable risk-to-reward ratio. Staying agile and informed amid evolving macroeconomic and policy developments will be crucial for navigating the near-term market landscape."
Disclaimer: The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.
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