Mumbai, June 13: The Indian stock market experienced significant gains this week, buoyed by rising investor confidence regarding a potential peace agreement between the United States and Iran, alongside a decline in Brent crude oil prices. This marks a rebound after two consecutive weeks of losses.
The Nifty index rose by 1.10% this week, closing at 23,623 on Friday with a robust increase of 1.99% on the last trading day. Meanwhile, the Sensex surged by 1,695 points, or 2.30%, finishing at 75,528, resulting in a weekly gain of 1.73% for the index.
Analysts noted that despite global challenges and uncertainties surrounding the U.S. Federal Reserve’s interest rate policy, the Indian stock market showed resilience. Large-cap stocks outperformed, while profit-taking was observed in mid-cap and small-cap stocks following a recent rally.
Experts indicated that while U.S. bond yields softened this week, persistent inflationary pressures and strong employment figures suggest that expectations for interest rate cuts may be postponed.
One analyst commented, “The Indian stock market traded within a limited range throughout the week, but a solid recovery was observed towards the end despite a slightly negative sentiment.”
Additionally, Indian bond yields also declined, attributed to increased liquidity in the market due to policies from the Reserve Bank of India (RBI) and growing interest from foreign investors in the debt market.
In terms of sector performance, the financial sector emerged as the strongest performer. Positive regulatory developments in private banks and a defensive stance from investors led to significant buying in these stocks. Furthermore, FMCG stocks also saw gains due to their ability to maintain prices.
Conversely, the IT sector continued to face declines. Concerns over weak demand in China and easing commodity prices exerted pressure on metal stocks.
Market experts believe that if the pace of selling by foreign institutional investors (FIIs) slows down or if clarity increases regarding U.S. Federal policies, the domestic stock market could receive additional support.
Throughout the week, FIIs sold shares worth approximately ₹15,300 crores, posing a significant challenge for the market. However, selling momentum slowed in the final days of the week.
In contrast, domestic institutional investors (DIIs) maintained strong buying, with a net investment of around ₹24,000 crores during the week.
The performance of broader market indices mirrored that of the major indices. The Nifty Midcap-100 index recorded a gain of 0.98%, while the Nifty Smallcap-100 index strengthened by 0.48%.
According to market experts, the 23,800 level will serve as a crucial resistance for the Nifty, while the 23,550 to 23,500 range may act as immediate support.
For the Bank Nifty, the nearest resistance is seen at 56,900 to 57,000, with the 56,500 to 56,400 range providing immediate support.
Investors are now focused on upcoming domestic wholesale price index (WPI) inflation data, China’s industrial production figures, and the Federal Reserve’s forthcoming interest rate decision, which could influence market direction in the coming days.
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