Market Wrap

Indian equity markets closed a volatile week on a subdued note, with benchmark indices surrendering early gains amid heightened profit-booking and a sharp sell-off in the final trading session. The Nifty50 ended the week near the 24,550 mark, down 0.72%, reflecting a cautious sentiment among investors despite a positive start to the week.

The biggest drag came on Friday, when the MSCI rebalancing exercise triggered an estimated ₹8,000 crore of passive outflows during the last hour of trade, leading to intense selling pressure after 3 PM and wiping out much of the week's gains. Market participants remained selective as consolidation set in following the recent rally.

On the sectoral front, Nifty IT stood out as the top performer, extending gains for a second consecutive week and holding firmly above its 20-day exponential moving average (DEMA). The strength in heavyweight technology stocks fueled hopes of a broader technical recovery in the sector.

Global cues remained broadly supportive. Japan's Nikkei surged more than 2.5% during the week, while South Korea's Kospi rallied over 3.5%, reflecting improving risk appetite across Asian markets. European equities, however, delivered a mixed performance as investors assessed global growth and inflation trends.

What's Ahead

The coming week is expected to be dominated by key macroeconomic and policy developments. The RBI Monetary Policy Committee meeting, scheduled between June 3 and June 5, will be the primary domestic trigger, with markets expecting a growth-supportive stance from the central bank.

Investors will also closely monitor developments in the ongoing US-Iran negotiations, as any progress or escalation could significantly influence crude oil prices and global market sentiment. Additionally, the visit of a US delegation to India from June 1–4 may keep trade, investment, and bilateral economic discussions in focus.

From a technical perspective, Nifty's immediate support is placed around the 24,500–24,400 zone, while resistance is seen near 24,820–24,900. Until greater clarity emerges from the RBI policy outcome and global developments, markets are likely to remain range-bound with stock-specific opportunities driving investor interest.

Market Snapshots

Institutional Activity

Sectoral Performance

Technical Outlook

Nifty 50

The Nifty 50 remained under significant pressure, extending its decline for a third consecutive session and closing below the psychologically important 23,600 mark. The index witnessed sustained selling throughout the day, indicating a lack of buying support at higher levels amid persistent FII outflows and rising macro uncertainties. Technically, the RSI has slipped towards the 40 zone, reflecting weakening momentum and increasing bearish sentiment. As long as the index remains below the immediate resistance zone of 23,743–23,864, downside risks may persist. On the lower side, support is placed at 23,353, followed by 23,232, and a breach of these levels could trigger further corrective moves. Traders are likely to remain cautious in the near term, with market direction expected to depend on institutional flows and upcoming macroeconomic triggers.

Bank Nifty

The Nifty Bank index closed sharply lower after witnessing accelerated selling in the second half of the session, reflecting weakening sentiment across both private and public sector banking stocks. The index failed to sustain above key intraday levels and ended near the day's low, highlighting continued distribution at higher levels. Momentum indicators have softened, with the RSI slipping below the neutral 50 mark, signalling fading buying interest and a possible continuation of the corrective trend. Immediate support is seen at 53,589, followed by 53,187, while resistance is placed at 54,889 and 55,291. A sustained move below support levels could invite additional selling pressure, whereas a recovery above resistance would be required to restore bullish momentum.

Nifty Financial Services

The Nifty Financial Services index witnessed broad-based weakness, with all constituents ending in negative territory, reflecting a decisive risk-off sentiment across banks, NBFCs, and insurance stocks. The sharp decline underscores deteriorating market breadth and suggests that investors are reducing exposure to rate-sensitive financial counters ahead of key domestic and global developments. Technically, the index has slipped closer to its immediate support zone of 25,055–24,870, which will be crucial for maintaining the medium-term uptrend. On the upside, resistance is positioned at 25,653 and 25,838. Unless the index reclaims these resistance levels, the near-term bias is likely to remain weak, with traders closely monitoring support levels for signs of stabilization.

Sensex

The Sensex witnessed a steep correction, falling over 1,000 points as broad-based selling across financials, power, automobiles, and consumer stocks overshadowed gains in select IT names. The index closed below the 75,000 mark, indicating a loss of bullish momentum and growing caution among market participants. Technically, the benchmark has entered a short-term corrective phase, with sentiment remaining fragile amid profit booking and external uncertainties. Immediate support is seen at 74,175, followed by 73,804, while resistance is placed at 75,376 and 75,748. A sustained hold above support levels could help stabilize sentiment, but failure to do so may result in further downside pressure in the coming sessions.