Market Overview: Muted Start on Mixed Cues
Indian equity benchmarks are set to commence trading on Monday with a muted sentiment, as indicated by GIFT Nifty Futures which traded 33.30 points, or 0.14 percent, lower at 23,715.50 on the NSE International Exchange. This cautious outlook for the Indian market follows a mixed performance across global indices.
On Friday, Wall Street's major indexes achieved record closing highs, extending their weekly and monthly gains. The Dow Jones Industrial Average climbed 0.72 percent to 51,032.34, the S&P 500 advanced 0.22 percent to 7,580.07, and the Nasdaq Composite rose 0.21 percent to 26,972.62. Conversely, Asian markets firmed up on Monday, propelled by continued demand in the artificial intelligence sector. South Korea's KOSPI surged nearly 2.5 percent, while Japan's Nikkei and Hong Kong's Hang Seng each gained close to three-quarters of a percent.
Expert Insights: Caution Amidst Geopolitical Uncertainty
Market analysts suggest that renewed uncertainty surrounding a potential US-Iran agreement is tempering the optimism that recently buoyed risk sentiment. Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, anticipates that benchmark indices will likely remain range-bound in the coming week. He notes, however, that select midcap and smallcap stocks could continue their outperformance, driven by robust earnings momentum and strong domestic liquidity. Investors are advised to remain cautious due to these mixed signals.
Ajit Mishra, SVP of Research at Religare Broking, recommends that participants adopt a cautious yet selective approach given the current geopolitical uncertainty, elevated volatility, currency fluctuations, and diverse global macroeconomic indicators. He advises traders to avoid excessive leverage and implement disciplined risk management strategies amidst heightened event-driven volatility.
Provisional data from the NSE reveals that Foreign Portfolio Investors (FPIs) were net sellers of domestic stocks, offloading Rs 21,105.86 crore on Friday. Over May 2026, overseas investors withdrew nearly Rs 33,000 crore from Indian equities. In contrast, Domestic Institutional Investors (DIIs) were net buyers, acquiring Indian equities worth Rs 16,764.14 crore. Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, warns that the continued FPI selling and elevated crude prices are likely to weaken the rupee. He also highlights a trend where capital flows towards AI companies globally contribute to capital flight from countries like India, which he describes as AI laggards, a trend he expects to reverse when the 'AI trade bubble' eventually ends.
Nifty50 and Sensex: Key Levels to Watch
For the Nifty50, Amol Athawale, VP of Technical Research at Kotak Securities, points to a long bearish candle on weekly charts, signaling potential further weakness. He suggests that a weak sentiment will persist as long as Nifty trades below its 50-day Simple Moving Average (SMA) of 23,700. Downside targets are identified at 23,300-23,200, potentially extending to 23,050-23,000. On the upside, a rebound above the 50-day SMA could push the index towards 23,800, and potentially 24,000-24,100 if it surpasses 23,800.
Hitesh Tailor, Technical Research Analyst at Choice Equity Broking, notes that Sensex experienced a sharp reversal from higher levels around the 76,200 zone, indicating strong resistance. Immediate support for Sensex is placed around 74,000–74,200, with resistance near 75,300–75,500. A sustained move below the support zone could trigger further weakness, while a recovery above resistance might improve short-term sentiment.
Osho Krishan, Chief Manager - Technical & Derivative Research at Angel One, identifies the 23,800-24,000 range as a critical resistance area for Nifty, aligning with the 20 DEMA and the previous weekly high. A decisive breakout above this range could revive buying interest and lead the index towards 24,300-24,350. Conversely, the 23,400-23,150 range is expected to offer immediate support, with a breach below potentially weakening overall market sentiment.
Nifty Bank Outlook: Support and Resistance
Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities, observes that the Nifty Bank consolidated before breaking down and drifting lower, forming a sizable bearish candle. He indicates that sellers maintain control over bulls, with immediate support for Bank Nifty in the 53,800-53,700 zone. A sustainable move below this could extend weakness to 53,300, then 52,900. Immediate resistance is found in the 54,600-54,700 zone.
Vatsal Bhuva, Technical Analyst at LKP Securities, highlights that Bank Nifty witnessed a consolidation congestion breakout and successfully reclaimed its 20-day and 50-day SMAs, signaling improving momentum. Despite some mild profit booking, the overall structure remains positive as long as the index sustains above the 54,400 zone. Support is expected around 54,500-54,400, while resistance is placed near 55,500-55,800. A sustained breakout above this resistance could open upside potential towards 56,200 and 56,500 levels.
Global Commodities and Currency
In commodity markets, Brent crude nudged up 1.9 percent to $92.89 a barrel, and US crude added 2.4 percent to $89.46, driven by a lack of fresh news. The dollar index, measuring the greenback against a basket of currencies, remained flat at 99. Gold saw little change, trading at $4,535 an ounce, finding limited support as a safe haven or an inflation hedge.