Stock market weekly wrap: Sensex, Nifty 50 end higher for third week. What to expect from Indian stock market next week?

Mumbai, India | June 7, 2025 —
The Indian stock market maintained its bullish trajectory for the third consecutive week, supported by strong domestic macroeconomic indicators, a stable monetary policy stance by the Reserve Bank of India (RBI), and sustained buying across key sectors. Both the Sensex and Nifty 50 posted weekly gains, offering investor confidence even amid global volatility and upcoming political events.

Weekly Performance Snapshot

• Sensex: Gained 299 points or 0.39% to settle at 76,992.77

• Nifty 50: Advanced 175 points or 0.78% to close at 23,465.60

The benchmarks extended their winning streak for a third straight week, with broad-based participation across banking, auto, FMCG, and energy stocks. Mid-cap and small-cap indices also joined the rally, indicating depth in market optimism.

What Drove the Rally?

1. RBI Holds Repo Rate Steady

In its June monetary policy review, the Reserve Bank of India maintained the repo rate at 6.50%, signaling confidence in the economy’s growth trajectory while staying committed to controlling inflation. Governor Shaktikanta Das highlighted that the Q4FY25 GDP growth forecast was revised upward to 7.2%, further reinforcing market sentiment.

"A neutral monetary stance combined with strong domestic demand is a sweet spot for equity markets," said Vinod Nair, Head of Research at Geojit Financial Services.

2. Healthy Economic Indicators

• India's manufacturing PMI remained in expansion for the 27th consecutive month.

• GST collections in May crossed ₹1.80 lakh crore, showing robust consumption activity.

• Forex reserves saw a $4 billion increase, offering more room for import support and rupee stabilization.

Sectoral Highlights

Banking & Financials

Banks saw positive traction after the RBI raised the risk weight on certain unsecured loans, which is expected to improve sectoral discipline. HDFC Bank, Kotak Mahindra Bank, and Axis Bank were among the top weekly performers.

Auto & FMCG

Auto stocks gained as monthly vehicle sales data showed double-digit growth, especially in passenger vehicles and two-wheelers. Maruti Suzuki and Tata Motors led the segment. FMCG players like Hindustan Unilever and ITC advanced amid expectations of improved rural demand.

IT Remains Subdued

IT stocks lagged behind due to margin pressures and muted revenue guidance from US-based clients. Infosys and Wipro saw minor corrections, but analysts expect bottom formation soon.

Global Cues Mixed

Global markets presented a mixed picture, with the US Federal Reserve keeping rates steady and signaling data-dependence. Meanwhile, crude oil prices declined slightly amid higher US inventories, supporting Indian markets due to lower import bills.

Geopolitical tensions in the Middle East and uncertainty in European elections, however, kept risk appetite in check.

Technical Outlook: What’s Next for Nifty and Sensex?

According to technical analysts, both indices are trading above their 20-day and 50-day moving averages, indicating bullish momentum.

"As long as Nifty holds above the 23,200 level, a move toward 23,800–24,000 is possible in the coming week," said Shrikant Chouhan, Head of Equity Research at Kotak Securities.
"On the flip side, profit-booking may emerge if Nifty breaches the 23,100 support zone."

Similarly, the Sensex could test the 77,500–78,000 level next week, barring any negative global developments.

Key Events to Watch Next Week

1. US CPI & Fed Interest Rate Decision (June 12): Will influence global risk appetite.

2. India’s IIP & Inflation Data (June 12): Domestic inflation figures will determine RBI's future course.

3. Progress of Monsoon: IMD updates on monsoon advancement could impact agri-related stocks and FMCG.

Investor Sentiment and Flows

Foreign Institutional Investors (FIIs) were net buyers for the week, injecting over ₹4,200 crore into Indian equities, while Domestic Institutional Investors (DIIs) continued their consistent support.

"With political stability, favorable economic data, and strong domestic flows, India remains among the top emerging market bets," said Ajay Bagga, Market Expert and Fund Manager.

Outlook: Cautious Optimism Ahead

While the overall sentiment remains positive, analysts advise caution due to potential profit booking and global uncertainty.

Investors should keep a close eye on:

• Valuations in high-flying sectors

• Q1FY26 earnings prelude

• Progress of the monsoon

• Global rate commentary

Short-term traders may consider tight stop-loss levels, while long-term investors can look for accumulation opportunities in sectors like banking, consumption, energy, and infra.

The Indian stock market has shown remarkable resilience, supported by solid macro fundamentals and policy continuity. With favorable domestic cues and improving global dynamics, the medium-term outlook remains constructive. However, investors are advised to stay nimble, keep an eye on global developments, and not chase momentum blindly.