In the previous trade setup, we discussed the NSE Nifty level of 25,200, which appeared to be a strong resistance, and as per the analysis, that played out. Nifty attempted to move higher but ended up near the 25,000 level.
This suggests that, in the near term, the market is waiting for fresh triggers that could push Nifty even higher from this level. Until then, it seems likely that the market will move sideways.
Friday’s trading session was marked by choppy movement throughout the day. The market opened flat and then formed a doji candlestick pattern on the 15-minute time frame. After that, it didn’t break that level for the rest of the day.
Nifty made a low around the 24,950 level and closed near the 25,000 marks. This suggests that the 25,000 to 25,200 range is likely to act as a significant level for the Nifty 50 in the coming sessions.
Global Market Analysis
Ukraine-Russia Ceasefire Talks
Following a low-level meeting involving Russia and a Ukraine Foreign Minister-led meeting held in Istanbul on Friday, it has emerged that Russia is making what Kyiv considers unacceptable demands for a ceasefire, as Ukraine has accused Russia.
In relation to this matter, a statement has been made by former U.S. President Donald Trump on his social media app, stating that the U.S. President is scheduled to have a phone call with Russia on Monday at 10 a.m. This is expected to be a more urgent discussion regarding the ceasefire and President Putin, as the U.S. President appears to be in a hurry to bring about a ceasefire and end the conflict.
Now, the outcome of these developments will be significant, as they will directly impact crude oil prices, commodity prices, and the global stock markets. From India’s perspective, the Indian defense sector might experience some relief if a ceasefire takes place.
U.S. Trade Deal Developments Globally
After reducing reciprocal tariffs to around 10%, the U.S. is actively pursuing trade deals across the globe. Several countries are particularly important for these deals, including Canada, Mexico, the European Union, and China, as they are among the U.S.’s largest trading partners.
According to a recent report from the European Commission, the U.S. does not plan to lower tariffs below the 10% level at this time. This has raised concerns, as Europe may implement countermeasures to rebalance the trade terms, based on a recent statement by a European Commission member.
Meanwhile, the U.S. and China have also been reducing tariffs in recent times. However, a formal trade deal between the two remains a critical factor. If no deal is reached, it could create negative sentiment around the U.S. economy.
In response to these uncertainties, JPMorgan has recently predicted a recession probability for the U.S. at slightly below 50%. Although this is not an increase, any rise in tariffs or further uncertainty could prompt JPMorgan to raise its recession expectations for the U.S. even higher.”
ECB Rate Cut Outlook
There are reports suggesting that the European Central Bank (ECB) might cut rates to around 2%, following the recent rate cut, which brought the rate down to approximately 2.40%. This move aligns with previous expectations, as the ECB lowered rates by 0.25 basis points in its last meeting.
According to the latest inflation data, which came in at around 2.2%, matching expectations, the economic outlook appears positive. If a trade deal with the U.S. materializes, we might even see the rate fall to or below 2%. This would be beneficial for the European economy, as lower borrowing costs could support growth.
Such a move may also have a slight positive impact on the Indian IT sector, given its strong business presence in the European market.
Domestic Market Analysis
IPOs in the Coming Week
The past couple of months haven’t been favorable for the Indian stock market, which is why IPO activity had slowed down. IPOs generally launch when market conditions appear healthy. However, this week, four IPOs are scheduled to hit the market—Morana Waves, Unified Data Tech Solutions, Victory Electric Vehicle International, and Bell Ride Industries.
These upcoming IPOs are expected to attract new participants to the market, as past IPOs have proven to be a strong driver of new account openings and investor interest. This trend is positive for sectors associated with capital markets and retail participation.
Nifty India Defense sector on rise
Whenever a nation faces a hurdle, it brings both challenges and opportunities. Recently, following the Pahalgam attack, India responded strongly with significant counter-terrorism efforts, including Operation Sindoor. This operation has provided a major boost to defense stocks.
India’s domestically produced defense equipment performed exceptionally well, demonstrating both effectiveness and global standards. As a result, the Nifty India Defense Index has surged more than 20% over the last six trading sessions—a remarkable rise largely driven by the success of Operation Sindoor. companies like the Mazagon and GRSE has made the more 30% jump in the stock price
In his address to the nation, PM Modi also highlighted the Made in India defense initiative, which outlines the key areas for the defense sector. This presents challenges as well as opportunities, and this is how the stock market works.
Trade deal with USA
Regarding the India-U.S. trade deal, Piyush Goyal, our commerce minister, is going to visit the USA next week to discuss the trade agreement between the two countries. This development has come after reaching a conclusion on the deal and clearing all the remaining pending issues.
Recently, Trump said that India offered a zero-tariff deal to the USA. In response, Foreign Minister S. Jaishankar stated that nothing is decided until everything is finalized. Such statements create a sense of uncertainty about the ongoing discussions. When the commerce minister holds a meeting and shares the outcomes with the public, that will be a key moment, as the market will certainly react positively to those conclusions.
FII and DII Data Analysis
Massive positive data was seen in Friday’s trade setup, as FIIs bought nearly ₹8,831 crore in the Indian equity market. Along with that, DIIs also became net buyers with a significant ₹5,187 crore investment in the Indian equity market. This kind of data provides strong support for the NIFTY 50 in the near future.
Several sectors are contributing positively, such as the defense sector, IT sector, and others, making significant contributions to the NIFTY 50. There is great potential for the upcoming period, and FIIs are expected to remain net buyers according to the reports.
NIFTY-50 Technical Analysis Outlook
After a flat movement in Friday’s trade setup, NIFTY appears poised for a strong upward move based on technical data analysis. On the daily chart, a Morning Star candlestick pattern has formed over the last three sessions, indicating a potential bullish trend ahead.
However, if we closely examine the data and technical indicators, the 25,200 level does not seem to hold much strength. While we may see some consolidation around that level, it is unlikely to be sustained for long, suggesting a relatively weak resistance zone.
So, based on the current levels, we see 25,234 as a potential resistance, primarily supported by technical indicators. However, it does not appear to be a strong resistance.
If this level is broken, we could see the previous all-time high acting as the next resistance. This would be a significant development. Such a move could realistically happen if the trade deal with the U.S. is finalized, FIIs continue their strong buying momentum, and the NIFTY IT sector contributes meaningfully. The IT sector still has room to push NIFTY higher, as many other sectors have already shown a strong performance.
Conclusion
The unprecedented buying from both FIIs and DIIs is providing strong data-based support for the Indian stock market. As long as this momentum continues, there is little need for technical support. There is still significant room for further FII buying, considering the heavy selling seen over the past couple of months.
Additionally, several positive developments are taking shape. For instance, China is facing high tariffs even as its trade deal progresses, while India has a good opportunity to finalize trade agreements with both the USA and the UK through a free trade deal. These developments are moving in a positive direction and are working out well overall.
Furthermore, the Nifty IT sector is expected to perform well, especially if favorable developments occur in the U.S. All in all, the outlook for the market in the coming times remains positive.
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