On Friday, the 50-stock index edged lower by 64.60 points, or 0.27%, to close at 23,719.30.
Stock markets will remain closed on Thursday, May 28, on account of Bakri Eid.
Rupak De, Senior Technical Analyst at LKP Securities, said Nifty failed to close above the crucial 23,800 resistance level for the second consecutive session despite a positive RSI crossover, indicating lack of strong momentum. The chart shows neither a breakout nor a breakdown visible on the charts with Nifty in an indecisive range-bound trade over the last 4–5 sessions, he said.
“A decisive breakout from this range is essential for the next leg of rally or correction to unfold. On the downside, immediate support is placed at 23,600, below which the index may drift towards 23,400. A breach below 23,400 could trigger a sharper correction in the market. On the higher side, a decisive move above 23,800 may induce a fresh directional upward move in the short term,” De said.
Iran-Israel war
After a long lull, developments on the Iran-US negotiations stalemate, undercurrents are being felt with Iran’s top negotiator and Parliament Speaker Mohammad Bagher Qalibaf meeting Pakistani Army Chief Asim Munir in Tehran as part of ongoing diplomatic efforts over regional tensions, Iranian state media reported on Saturday.
Munir also held meetings with Iranian President Masoud Pezeshkian in the presence of Foreign Minister Abbas Araqchi during his visit to Iran.US markets
Frontline indices on Wall Street closed in the green on Friday as treasury yields eased, lifting megacaps and chip stocks, though markets watched for signs of a breakthrough in discussions to end the Middle East war.
While Dow 30 ended at 50,579.70, gaining 294.04 points or 0.58%, the S&P 500 was 0.37% (27.75 points) higher at 7,473.47. The tech-heavy Nasdaq Composite was down by 50.87 points or 0.19%.
Bond yields
With inflation worries resurfacing, global investors are closely tracking movements in the bond market. The yield on the 30-year U.S. Treasury note surged to 5.201% on Wednesday — its highest level since 2007 — amid growing uncertainty over the outcome of the Middle East conflict, which has heightened fears of elevated energy prices and renewed inflationary pressures. The yield was last seen trading at 5.0795%.
Investor sentiment toward equities also weakened globally. U.S. equity funds witnessed outflows of $12.05 billion during the week, marking the second weekly withdrawal in the past three weeks. Asian equity funds too saw net outflows of $570 million, while European funds bucked the trend by attracting net inflows of $4.62 billion. Sectorally, technology funds continued to remain in favour for the seventh straight week, garnering net inflows of $6.94 billion. In contrast, financial and industrial sector funds saw investors pull out $2.8 billion and $1.3 billion, respectively.
Crude oil
Global benchmark crude oil prices will remain an important factor in determining the direction of domestic markets.
The US WTI crude oil futures ended at $97 per barrel on Friday, dropping $0.65 or 0.67% in a single session while Brent witnessed an uptick of 1.63% or $1.67 per barrel to close at $103.54.
FII/DII action
FII outflows have been one of the biggest spoilers of market sentiments and will be tracked when markets resume trading this week.
On Friday, FIIs sold domestic shares to the tune of Rs 4,440.47 crore while domestic institutional investors (DIIs) were net buyers at Rs 6,003.53 crore.
Foreign institutional investors (FIIs) have offloaded domestic equities worth Rs 2.22 lakh crore in 2026, remaining net sellers for the third successive month-to-date. They have sold shares worth Rs 30,374 crore, so far this month.
Technical triggers
Nilesh Jain, Vice President – Head of Technical and Derivative Research at Centrum Finverse said Nifty has formed a small bullish candle on the weekly chart. Encouragingly, the index managed to sustain above its 50-DMA, placed near 23,690, which is likely to act as an immediate support level, while the next crucial support is seen around 23,500, he said.
“On the upside, a decisive breakout above 23,800 is essential to trigger a fresh short-covering rally towards 24,000 and higher levels. The broader market structure continues to remain constructive and indicates a positive undertone. Going into the coming week, volatility is expected to remain elevated owing to the monthly F&O expiry. We expect the Nifty to trade within a broader range of 23,500–24,000 with a positive bias. The India VIX declined nearly 5% during the week and closed below the 18 mark. A further cooling-off in volatility would continue to support bullish sentiment in the market,” Jain said.
Rupee Vs dollar
The Indian rupee rallied to close above the 96-per-dollar mark for the first time in a week on Friday, helped by the central bank’s aggressive interventions to arrest the currency’s slide from 94.50 to nearly 97.
The rupee closed at 95.69 per dollar, up 0.5% from its close in the previous session.
The Reserve Bank of India sold $2 billion to $3 billion on Thursday and intervened in the markets again on Friday, according to bankers.
Two state-run lenders were consistently selling dollars through Friday’s trading session, three traders told Reuters, adding that this marked a change from relatively subdued and intermittent activity in the earlier part of the week.
“It seems the RBI’s intends to draw some version of a line-in-the-sand for rupee weakness,” a senior trader at a foreign bank said. The currency had weakened from 94.50 on May 8 to a record low of 96.96 on May 20.
State-run banks were spotted conducting dollar-rupee buy/sell swaps as well, most likely on behalf of the RBI, the bankers added. Dollar-rupee forward premiums fell as a result, with the 1-year implied yield down 6 basis points at 3.39%.
The central banks’ presence also ensured that the rupee was largely unfazed by a more than 2% rise in Brent crude prices to $105 per barrel on Friday as investors doubted the prospect of a breakthrough in the U.S.-Iran talks.
Stocks in focus
Stocks of oil marketing companies (OMCs) will be in focus after petrol and diesel prices were hiked on Saturday for the third time in less than two weeks. The government said India had absorbed the impact of rising global oil prices for 76 days following the outbreak of the US-Iran conflict.
The cumulative increase is under Rs 5 per litre as on Saturday.
Select stocks will also be in focus because of corporate actions lined-up during the week.
Stocks like Havells India, Trident, LTM, Siyaram Silk Mills, Tata Consumer Products, Tata Consultancy Services, ITC, Torrent Pharmaceuticals, Bajaj Auto, UNO Minda and Bank of India will have record dates for their dividend.
Meanwhile, Zydus Lifesciences, CyberTech Systems and Software and Dhanuka Agritech will have record dates for buyback of shares.
Life Insurance Corporation of India will have a record date on Friday, May 29 for bonus issue.
(Inputs from agencies)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
