Last week’s outlook suggested that Nifty had entered a crucial support range of 22,254 – 21,930, creating a favorable environment for a “bottom formation” and offering excellent opportunities for short-term investors. It was noted that if these supports held, Nifty could recover toward the 23,480 – 23,636 – 24,333 levels.
True to that assessment, the opening day low of 22,542 remained the lowest point of the week. The index improved daily, eventually touching 24,074 before closing the week at 24,050. This move didn’t just break a six-week losing streak; it marked the best weekly gain in the last five years. From the previous week’s low of 22,182, Nifty staged a recovery of approximately 1,900 points.
Market Drivers
Sector Performance: Banking and Auto indices recorded a significant 8% growth last week.
Global Cues: News of a temporary de-escalation in the US-Iran conflict sent crude oil prices crashing by over 16% in a single day, boosting market sentiment.
Domestic Factors: The RBI’s decision to maintain the repo rate at 5.25% and its optimistic GDP growth projections were well-received.
Earnings Season: TCS kicked off the quarterly results. This week, heavyweights like HDFC Bank, ICICI Bank, HCL Tech, and Infosys are set to report.
Key Levels to Watch
Resistance (Upside):
Crossing these levels is essential for the upward momentum to continue:
24,080 – 24,170: Initial resistance zone.
24,304: A very critical resistance area.
24,530 – 24,855: Subsequent targets if the above are breached.
Support (Downside):
If the market faces pressure, keep an eye on these levels:
23,930 – 23,817: Immediate support.
23,682: The next safety net.
22,900 – 22,719: Major support floors if volatility increases.
Crude Oil & Geopolitical Risks
Market movement remains heavily dependent on crude oil. While crude hit a high near the 115.93 resistance before dropping toward the 91.15 support, it closed at 95.20. Crude needs to close and stay below 91.15 to “cool off”; otherwise, it may retest higher resistance levels.
The failed talks between the US and Iran (mediated by Pakistan) last Saturday suggest that tensions could escalate again. The Strait of Hormuz remains the focal point; currently, nearly 300 tankers carrying crude are stranded in the Persian Gulf. Sustained market recovery depends on the reopening of this shipping route and the subsequent drop in oil prices.
Other Asset Classes
Currency: The Rupee closed at 93.15. Immediate support is at 91.76, while resistance stands at 93.68.
Dollar Index: Futures closed at 98.44. Watch for 99.35 on the upside and 97.06 as major support.
Silver: The “star performer” of the week. After touching support at 60.87, it surged to close at 76.48 (above the key 75.35 level). If it stays above 75.35, it could test 86.50 – 91.50 – 95.69.
Gold: Closed at 4,787. Key supports are at 4,684 – 4,422. On the upside, it needs to clear the 4,841 – 4,872 resistance for a further rally.