The Indian equity market witnessed a stellar rally this week with a more than 1,000 point gain on the benchmark Nifty 50. The Nifty managed to close above the 25,000 mark and recovered all the losses seen since October 2024.

The week started with a bang, with rapid developments over the weekend on the border front that led to a stoppage in hostilities between India and Pakistan. Operation Sindoor, conducted by the Indian armed forces, was a decisive success that translated into improved market sentiment.

The strength in the frontline indices translated into broader market gains with the BSE Midcap/Smallcap indices gaining 6.9%/9.2% respectively.

“From a technical standpoint, the current chart structure suggests that the bullish momentum is likely to extend into the coming week. We expect Nifty to move toward 25,300 in the short term, with the potential to stretch further toward 25,600,” noted domestic brokerage firm SBI Securities.

SBI Securities further noted that on the downside, the zone of 24,750-24,700 is likely to provide a cushion in case of any immediate decline.

Factors that are likely to impact movement when markets reopen this week:

1. Corporate earnings

Next week, the markets will focus on the remainder of the earnings season.

2. India-US trade deal

The market will also look out for any likely developments on the India-US trade deal.

3. Foreign inflows

Participants will continue to monitor foreign capital flows, which have played a significant role in sustaining the current rally.

4. Technical outlook

Having broken out of a three-week consolidation, the Nifty is expected to sustain its upward momentum.

“The index is now targeting levels of 25,200–25,600. On the downside, the earlier resistance at 24,800 is likely to act as immediate support, with a stronger support base at 24,400,” said Ajit Mishra, SVP of Research at Religare Broking.

5. Currency moves

The Indian Rupee appreciated marginally by 5 paise against the US dollar, closing at 85.50. This gain was supported by a weakening dollar index and easing crude oil prices.

Rupee traded in a narrow range between 85.45 and 85.48 against the US dollar, reflecting a largely range-bound session. The dollar index hovered around 100.70, showing limited directional bias.

“With no major triggers, the rupee is expected to continue trading within a broader range of 85.00 to 85.75 in the near term,” noted Jateen Trivedi, VP Research Analyst - Commodity and Currency at LKP Securities.

6. Crude Oil impact

Oil prices have inched higher to $62.3/barrel on the back of a weaker dollar. However, any sharp gains may be capped by the potential US-Iran deal and ongoing uncertainty surrounding global trade and economic growth.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)