Sensex, Nifty Prediction For May 19-24; What Will Drive Indian Stock Market In The Week Ahead?

Indian stock market recorded weekly gains with Nifty 50 outperforming Sensex. Last week, Sensex jumped 0.6% overall, while Nifty zoomed by 1.7%. The success of Operation Sindoor led to a strong rally with Nifty closing the week above 25,000. The upside trend was majorly driven by an easing in geopolitical tensions. For the trading week from May 19-23, sentiments in Indian stocks will be influenced by earnings and high-frequency economic data.

Sensex, Nifty:

Last week, on May 16th, Sensex closed at 82,330.59, down by 200.15 points or 0.24%. This comes after the 30-scrip benchmark neared 82,515 levels.

Sensex is now above all its SMAs. It is higher from 50-Day, 100-Day, 150-Day, and 200-Day SMAs of 77,367.4, 77,224.3, 78,215, and 79,137.5.

Meanwhile, Nifty 50 ended Friday at 25,019.80, marginally down by 42.30 points or 0.17%. The benchmark touched its highest weekly level of 25,070.

Also, Nifty 50 is above all its 8 SMAs. Its 50-Day, 100-Day, 150-Day, and 200-Day SMAs are at 23,470.8, 23,399.4, 23,724.5, and 24,053.8.

SMA means simple moving averages which usually track a stock or indices average closing price over a specified period of time. For example, Sensex and Nifty's 200-day SMAs are at 79,137.5 and 24,053.8, while their current prices are higher by 4% each from the 200-day average prices.

If the stock or indices are higher from their SMAs they indicate an upward trend.

"The rally witnessed broad-based participation, with all major sectors contributing to the gains. Realty, metal, and energy stocks emerged as the top performers. Moreover, thematic plays such as defence, railways, and select PSUs across sectors attracted notable investor interest," Ajit Mishra - SVP, of Research, Religare Broking wrote in a note.

Broader market indices outperformed their benchmark counterparts, with midcap and smallcap indices recording robust gains in the range of 7%-9%, further strengthening market sentiment, he added.

Who Were Best Performers From May 12-16?

The strength in the frontline indices translated into broader market gains with the BSE Midcap/Smallcap indices gaining 6.9%/9.2% respectively. All the sectoral indices ended in the green this week. BSE Realty was the biggest gainer (+10.7%) as softer-than-expected consumer inflation in April brightened hopes of a larger rate cut in the upcoming June policy meeting of the RBI's MPC. Other rate-sensitive sectors such as Auto, Consumer Durables and Banking also witnessed healthy gains, as SBI Securities analysts note.

Also, the analysts highlighted that softer inflation also led to a further correction in the 10-year bond yield which lowers borrowing costs for the government as well as corporates. Defence stocks saw a massive rally as Made-in-India defence systems performed impressively during Operation Sindoor. Earnings season so far in 4QFY25 has been better than expectations with many companies managing to surpass consensus estimates.

India's consumer price index (CPI) inflation touched its lowest level since July 2019, to a staggering 3.16% for April 2025. CPI is now below RBI's lowest target of 4% for third consecutive month. Experts are predicting are probability of 25 basis points rate cut.

Sensex, Nifty Prediction For May 19-23:

With no major global or domestic events scheduled, market focus is expected to shift towards domestic earnings and high-frequency economic data for directional cues. Updates on global trade deals and their impact on global markets will also be closely tracked, as per Mishra's note.

In the coming week, Puneet Singhania, Director at Master Trust Group highlighted that as the India-Pakistan conflict now stabilized and all major geopolitical events behind, investor focus is likely to shift toward assessing the ongoing Q4 corporate earnings season. Additionally, there is growing optimism around the possibility of an early India-US trade deal, which could provide further support to market sentiment. Alongside domestic developments, key global economic data releases will also influence investor flows and overall market direction.

For next week, the Q4 earnings with several major companies set to announce their results including Power Grid Corporation of India Ltd, Hindalco Industries Ltd, ONGC Ltd, Sun Pharmaceuticals Industries Ltd, ITC Ltd, Grasim Industries Ltd, and JSW Steel, among many.

Technical Outlook:

Nifty ended the week strong with a 4.21% gain, crossing the 25,000 level after seven months, showing clear bullish strength. The index is holding above the 21-day and 55-day moving averages, which supports the upward trend. Key support is around 24,800, a previous breakout area. If this level breaks, the index may fall toward 24,500, which is also the low of the weekly candle. On the higher side, resistance is seen near 25,250. If Nifty moves above this level and holds, it could head toward 25,600. Positional traders can look to buy on dips near the support zone, said Singhania.

Having broken out of a three-week consolidation, Mishra believes that the Nifty is expected to sustain its upward momentum. The index is now targeting levels of 25,200-25,600. On the downside, the earlier resistance at 24,800 is likely to act as immediate support, with a stronger support base at 24,400.

Within the index constituents, the banking sector has entered a consolidation phase after a strong run. However, it continues to hold firmly above its short-term 20-day exponential moving average (20-DEMA), indicating a potential resumption of the uptrend. The index could see an upside move towards 56,000 and eventually 57,500, with 54,350 and 53,600 acting as key support levels on any dip, Religare's note said.

For Bank Nifty, Singhania said, it is trading above its 21-day moving average of around 54,300, which supports the ongoing uptrend. The index is currently at the upper edge of the trading range, showing strong momentum. Key support is placed between 54,500 and 54,400, offering a good zone for dip buying. On the upside, 55,600 is the next resistance. A sustained move above this level could trigger a sharp rally toward 56,100. Overall, the setup remains positive, and traders can look to buy on dips.

Stocks Specific Prediction:

"We maintain a bullish outlook on the market and advise investors to adopt a "buy on dips" approach. With all major sectors participating in the rally on a rotational basis, stock selection based on a favorable risk-reward profile remains critical," Mishra's note said.

In particular, the analyst said, thematic plays like defense, railways which have shown exceptional performance in recent weeks, may continue to offer opportunities. However, traders should maintain a disciplined approach, including clear exit strategies while pursuing momentum trades, and avoid taking contrarian positions without strong supporting signals.

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.