Weekly Stock Market Recap: Nifty 50 and Sensex Surge for Third Consecutive Week – What to Anticipate in the Indian Stock Market Next Week?

The Indian stock market has showcased remarkable resilience, extending its upward trajectory for the third consecutive week, with gains surpassing 1%. This positive momentum has been largely driven by robust foreign fund inflows and impressive corporate earnings. Despite an initial surge, the benchmark indices traded within a narrow band throughout the week but ultimately concluded on a high note. The Nifty settled at 24,346.70, while the Sensex closed at 80,501.99.

Market Performance Overview

In the previous week, broader market indices faced some turbulence after a strong performance. According to the Weekly Wrap report by SBI Securities, the BSE Midcap index witnessed a modest 0.4% increase, while the Smallcap index experienced a decline of 1.3%.

Key highlights:
- Nifty: 24,346.70
- Sensex: 80,501.99
- BSE Midcap: +0.4% WoW
- BSE Smallcap: -1.3% WoW

Key Drivers for Next Week

The markets maintained a positive tone, bolstered by favorable IIP data, which indicated a 3% growth in industrial production for March. Stability in global markets, alongside ongoing discussions regarding U.S. bilateral trade, further lifted investor sentiment.

Foreign Institutional Investors (FIIs) were net buyers this week, enhancing overall market confidence.
Reserve Bank of India (RBI) expressed optimism regarding India’s growth trajectory, showcasing resilience in the face of challenges.

Ajit Mishra, Senior Vice President of Research at Religare Broking, noted that the Realty sector emerged as a key contributor to the market’s strength. Other sectors, including automotive, IT, pharmaceuticals, and energy, also posted gains. Conversely, sectors like media, metals, and FMCG struggled, leading to mixed outcomes in broader market indices.

Upcoming Events to Watch

The upcoming week is set to be pivotal, with numerous significant domestic and international triggers on the horizon. Investors will closely monitor developments concerning tariffs and geopolitical dynamics with Pakistan.

Economic indicators to watch:
- HSBC Composite PMI
- HSBC Services PMI Final data
- U.S. Federal Reserve Interest Rate Decision on May 7

On the corporate front, several major companies, including M&M, Coal India, Asian Paints, and Titan, are slated to announce their quarterly results. Additionally, updates on tariffs and trade will be monitored closely.

Technical Outlook for the Nifty

The Nifty has experienced a continuous upward trend for three weeks, suggesting potential consolidation before any significant directional shifts. Mishra highlighted that the index has been oscillating between 24,000 and 24,600, emphasizing the importance of maintaining the 23,800 support level to sustain its bullish outlook. A breach below this level could trigger profit-taking, with next support found around 23,400.

Potential breakout points:
- Above 24,400 could reignite bullish momentum towards 24,800.
- Bank Nifty shows signs of consolidation but remains above key moving averages.

Trading Strategy Recommendations

Mishra advises investors to adopt a positive stance with a "buy on dips" strategy, focusing on hedged positions in the index. Selective stock-picking based on sector-specific opportunities is encouraged, with an emphasis on identifying stocks that offer favorable risk-reward ratios.