Stock market weekly wrap: Sensex, Nifty 50 end in red for second week; What to expect from Indian market next week?

Indian stock market: Both market indices – Sensex and Nifty 50 – wrapped up the week on a cautious note, marking a second straight week of consolidation.

The tepid performance was influenced by persistent global trade tensions and uncertainty around upcoming domestic policy decisions. Throughout the week, the benchmark indices—Sensex and Nifty—experienced significant volatility, ultimately ending in the red as investors weighed concerns over potential U.S. tariff actions and looked ahead to the Reserve Bank of India’s (RBI) forthcoming monetary policy announcement. By week’s end, the Nifty closed at 24,750.70, and the Sensex settled at 81,451.01.

“Domestic equity benchmarks ended slightly lower on Friday, with the Nifty50 slipping 0.3% to close at 24,751, amid cautious global cues and broad-based sectoral weakness. The broader markets were all weak, with both Nifty Midcap100 and Smallcap100 marginally down by 0.1% each, as selling pressure was seen across IT, Metal, and Auto sectors.” said Siddhartha Khemka, Head – Research, Wealth Management, Motilal Oswal Financial Services Ltd.

Key market drivers for next week

Early in the week, market optimism was driven by the RBI’s record dividend payout and favorable monsoon developments. However, this upbeat mood was dampened later by worries over climbing U.S. bond yields, escalating trade tensions between the U.S. and the European Union, and ongoing legal disputes over U.S. tariffs—all of which constrained any significant market rebound.

“Next week, interest rate-sensitive sectors—particularly PSU banks—are likely to remain in focus amid growing hopes of an RBI rate cut. Additionally, the release of monthly auto sales and volume data could trigger sector-specific moves in the automobile space. Nifty ended May with gains of 1.7%, its 3rd consecutive month of rise. We expect markets to maintain its positive momentum in June on the back of strong Q4 GDP numbers, hopes of RBI rate cut and consistent institutional inflows,” Khemka added.

Technical outlook for next week

According to Ajit Mishra – SVP, Research, Religare Broking Ltd, after spending the last two weeks in a consolidation phase, the 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,” Mishra said.

Meanwhile, speaking on the Bank Nifty outlook, Mishra said, “ 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.”

What should be your trading strategy for next week?

Market experts maintain positive stance in June and recommend investors to keep looking for buying opportunities.

“We maintain our constructive view on the markets and recommend looking for buying opportunities unless the Nifty decisively breaks below the 24,600 mark. Within sectors, banking and financial services remain our top picks, while FMCG and IT are expected to trade subdued,” Mishra said.

He further added, “ 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: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.