Sensex and Nifty Slip as Investors Await RBI Policy Decision
The Indian stock market witnessed a cautious close this week as both benchmark indices, Sensex and Nifty 50, ended in the red, marking the second consecutive week of consolidation.
Mumbai: The Indian stock market witnessed a cautious close this week as both benchmark indices, Sensex and Nifty 50, ended in the red, marking the second consecutive week of consolidation. The markets faced significant volatility due to persistent global trade tensions and uncertainty surrounding upcoming domestic policy decisions.
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The Nifty 50 closed at 24,750.70, while the Sensex settled at 81,451.01 by the end of the week. Investors remain cautious amid concerns over potential U.S. tariff actions and the impending Reserve Bank of India (RBI) monetary policy announcement.
Sectoral Weakness Drives Market Sentiment
Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, noted that “Domestic equity benchmarks ended slightly lower on Friday, with the Nifty50 slipping 0.3% amid broad-based sectoral weakness. Selling pressure was visible across IT, Metal, and Auto sectors.” Midcap and Smallcap indices also saw marginal declines, reflecting cautious investor sentiment.
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Key Drivers to Watch for Next Week
Market optimism earlier in the week was bolstered by RBI’s record dividend payout and favorable monsoon conditions. However, rising U.S. bond yields, escalating trade tensions between the U.S. and the European Union, and ongoing legal disputes over tariffs limited a strong market rebound.
According to Khemka, “Interest rate-sensitive sectors, particularly PSU banks, are expected to remain in focus amid hopes for an RBI rate cut. Upcoming monthly auto sales data could also influence the automobile sector.” Despite the challenges, the Nifty ended May with gains of 1.7%, its third consecutive monthly rise, and is expected to maintain positive momentum in June supported by strong GDP growth and institutional inflows.
Technical Outlook: Nifty and Bank Nifty Poised for Movement
Ajit Mishra, SVP of Research at Religare Broking Ltd, provided a technical perspective, stating, “The Nifty is currently in a consolidation phase and a close above the 20-day exponential moving average (around 24,600) is crucial to sustain bullish momentum. A breach below this could lead to further profit booking.” Mishra indicated that a strong move above 25,200 would open doors to new highs.
On the Bank Nifty, Mishra commented, “The banking index remains key to market momentum. A breakout above 56,000 could push the index towards 57,500, providing a catalyst for the broader market.”
Expert Trading Strategy for the Week Ahead
Market experts maintain a positive outlook for June, recommending investors seek buying opportunities. Mishra advised, “We suggest focusing on banking and financial services sectors, while FMCG and IT may trade subdued. Investors should prioritize fundamentally strong stocks with favorable risk-reward profiles and stay informed about macroeconomic developments.”
