Markets end higher for second week; Nifty eyes 25,650 as bulls regain control

Markets Continue Upward Momentum as Bulls Tighten Grip

Indian equity markets wrapped up the week on a bullish note, marking the second consecutive week of gains as the NSE Nifty 50 surged past key resistance levels. Riding on positive global cues, firm domestic macroeconomic indicators, and strong institutional inflows, the benchmark Nifty ended the week up 1.6%, closing just shy of 23,950. Analysts now peg the next milestone at 25,650 — a target that may not be too far off if the momentum sustains.

The BSE Sensex mirrored the optimism, adding over 1,000 points during the week, closing near 79,000, backed by a sharp rally in IT, banking, and auto stocks.

Key Drivers Behind the Rally

1. Global Market Strength: A recovery in global equities, supported by a pause in rate hikes from the US Federal Reserve and dovish commentary from central banks, has eased investor fears. Asian peers such as Nikkei and Hang Seng also posted weekly gains, reflecting a risk-on sentiment globally.

2. Domestic Macro Resilience: India’s latest trade data and stable inflation figures continue to paint a robust picture of the economy. The CPI for May remained well within the RBI's comfort zone at 4.83%, easing concerns about potential rate hikes.

3. FII Buying and Institutional Confidence: Foreign Institutional Investors (FIIs) pumped in over ₹8,200 crore into Indian equities this week, a significant reversal from net selling in May. Domestic Institutional Investors (DIIs) also continued their steady accumulation, further strengthening market breadth.

Sectoral Performance

IT and Auto Lead the Charge
Nifty IT gained over 3% during the week, supported by upbeat guidance from key players like Infosys and HCL Tech. The auto sector also witnessed robust traction with Nifty Auto rising over 2.5%, buoyed by strong sales forecasts and cooling input costs.

Bank Nifty Regains Strength
Banking stocks also joined the rally with Nifty Bank climbing over 1.8%, helped by stable credit growth and improving asset quality outlook across major lenders.

FMCG and Pharma Lag
Defensive sectors like FMCG and Pharma underperformed, with investors rotating money into high-beta stocks amid rising risk appetite.

Expert Commentary

“Markets have decisively broken above consolidation levels. Nifty has cleared 23,900 with strong volume and breadth, indicating that we may be heading towards the 25,650 zone in the medium term,” said Vishal Mehta, Technical Analyst at Kotak Securities.

Sonal Jain, Fund Manager at ICICI Prudential AMC, added, “We are seeing a perfect confluence of global support, local macro resilience, and earnings optimism. With Q1 FY26 earnings season just around the corner, there's further scope for stock-specific rallies.”

Technical View

From a technical perspective, Nifty has established a higher high-higher low structure on the weekly chart, reinforcing bullish momentum. The index is now trading well above its 20-day and 50-day moving averages, and the RSI remains comfortably in the bullish zone around 68.

A sustained close above 24,000 could open the gates to test 24,250 and 24,700 in the near term. On the downside, support lies at 23,600 and then at 23,350.

Investor Outlook: What to Watch Next

With markets now firmly in bullish territory, investors are advised to stay selectively optimistic. Analysts recommend focusing on earnings visibility, particularly in the IT, banking, capital goods, and auto segments.

“While the short-term view is bullish, investors should maintain a balanced portfolio and avoid herd behavior, especially in speculative pockets,” cautioned Meera Kulkarni, Chief Strategist at Quantum Advisors.

Key triggers in the coming week include:

• June F&O expiry on Thursday

• Crude oil price trends and their impact on inflation

• Global central bank commentary and data releases

• Domestic auto sales data for June

The Indian equity market’s upward climb has clearly gathered pace, supported by structural and cyclical tailwinds. With the Nifty poised to aim for 25,650 in the coming months, investor sentiment remains upbeat. However, the path ahead may still include brief pullbacks, offering opportunities for accumulation.

For long-term investors, this could be a time to align portfolios with high-conviction themes, while keeping an eye on valuations and market volatility.