Overview: The Week Ahead for the Indian Stock Market

Markets reacted positively after RBI’s 25-basis-point repo rate cut and key announcements in the Union Budget 2025. Though, RBI announced its first rate cut in five years, markets still failed to reap out positive reaction from investors. Several factors including poor Q3 earnings and depreciation of Indian rupee against the US dollar played the spoilsport.

Last week Pharmaceuticals (+3.4%) and Metals (+3.4%) led the gains, while Fast-Moving Consumer Goods (-5.5%) and Real Estate (-3.6%) were the biggest laggards.

Index Overview

Last week, close to 40% of the stocks in Nifty 50 were trading above their 50-day moving average (DMA), a significant change from the lows of 10-15%.

FIIs outlook

Foreign Institutional Investors (FIIs) eased their bearish stance. Starting the week with a long-to-short ratio of 10:90, net short open interest (OI) reduced by 15% wherein the contracts came down to 1.56 lakh on the expiry day.

FIIs sold equities worth ₹8,852 crore, while Domestic Institutional Investors (DIIs) purchased equities worth ₹6,449 crore during the same period.

Nifty Outlook

The Nifty rebounded towards its 21-week exponential moving average, it struggled to maintain gains on a closing basis. The index faced strong resistance in the critical 23,800-23,900 zone.

However, despite the turnaround, the index ended the week in positive territory. Traders can introspect the resistance zone of 23,800- 23,900, while the immediate support zone stood between 23,000 to 23,200.

Sensex Outlook

Continuing its winning streak for the second consecutive week, Sensex faced resistance near the 21-week exponential moving average (EMA). Immediate support is seen at 74,200 level.