Week Ending June 27th 2025

Dear patrons, the Indian markets saw a stupendous rally in the week gone by. Benchmark Nifty ended the month of June with a 4% gain over previous month while the BankNifty posted a 3% MoM (month on month) gain. Almost all sectoral indices also closed in the green for the week. Easing geopolitical tensions and falling Crude Oil prices have prompted investors to shift to "Risk On" mode. In the "Risk On" mode we may see some softening in precious metal prices along with commodity prices.

Indian markets remained resilient during the turmoil around the globe be it geopolitical or economical. A lot of credit for the Indian markets' stability goes to the Domestic Institutional Investors. Rising confidence in Mutual Funds by retail investors has transformed into rising AUMs (Assets Under Management) for various AMCs (Asset Management Companies). Big corporates are also playing along by parking their idle funds with respective AMCs to boost Domestic strength.

Globally, the US markets were very buoyant after announcement of cease fire in the middle East and release of Fed statement. The Federal Reserve chair promised two more cuts in the year irrespective of inflation and state of economy. The statement fueled rally in all indices in the US, with the S&P 500 rising to a lifetime high. European markets were also largely positive. As the deadline for implementation of tariffs draws closer, we may see some jitters in the markets.

Back home, falling Crude oil prices along with falling Dollar index augurs well for the Indian markets in the near future. Fall in Crude prices reduces India's import bill thereby reducing the Current Account Deficit, which in turn pushes Capital Expenditure by Government northwards. In fact, the CAD for January-March 2025 quarter swung into surplus, clocking nearly $14 bn in the positive, that too amid 3 wars.

Let us now try to figure out what lies in store for our markets in the coming week.

As we can see Nifty moved higher gaining more than 2% over the week. A lot of this up move can be attributed to short covering on account of the June series derivatives contract expiry. Nifty achieved 25500 as mentioned in the previous blog and surpassed our target to close a tad below 25650. For the coming week Nifty may face resistance in the 25800-26000 range. 26150 appears to be the target for this rally and a close above this level may trigger further up move towards new lifetime high levels. On the downside 25200-25000 becomes a strong support zone for Nifty. As long as 25000 holds it remains a "Buy-On-Dips" market.

BankNifty has been the early mover in this rally. It is comfortably placed at a lifetime high ready for further push in the no resistance zone. Banks and NBFCs have remained flavor of the markets for some time now and are expected to remain top picks for institutions, thereby lending strength to BankNifty to move further ahead. 57800-58000 should act as immediate resistance. Close above 58000 may lead BankNifty towards 60000 in a hurry. On the downside 56400-56200 should act as support.

Markets are looking strong and a surplus CAD resulting in more capex should provide more impetus for further up move. Extension in tariff deadline is on the cards, which again, is a positive for the markets. Investors should look to accumulate good quality stocks in select sectors. 

Stay Invested!!!

“Everyone has the brainpower to make money in stocks, not everyone has the stomach.” ~ Peter Lynch

P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk. 

Week Ending June 20th 2025

Dear patrons, the Indian markets have been quite volatile over the last few days. Geopolitical tension has played a key role in this volatility. Situation across the middle East remains extremely capricious casting a shadow of war over the entire globe.

Indian markets have a lot to cheer as well as worry about. In an unprecedented move the Reserve Bank of India cut interest rates by 50 bps along with a staggered CRR (Cash Reserve Ratio) cut of 100 bps. The RBI has been very aggressive since the new Governor took over. It has pushed huge liquidity in the system through the use of OMOs (Open Market Operations, a whopping 3,00,000 crores), Interest Rate cut and CRR cut. RBI is eyeing impetus to GDP growth. Inflation has played a key role in RBI's bold decision, by touching a multi-year low. Worry for the markets is the ongoing tension in the middle East. Things might spiral into a full-blown war any time. A full-scale war is not good for the World as it may put pressure on Crude, which has already moved towards $80/barrel. Rising crude oil is extremely worrisome for a developing economy like India.

The US markets over the last week remained a mixed bag. The Federal Reserve held status quo in interest rates and there is possibility of two rate cuts during the year. These rate cuts however depend on inflation, which is not showing any signs of abetment. 

Coming back to Indian markets, we saw some sharp up move on Friday. Benchmark Nifty closed well above its psychological resistance of 25000.Domestic institutions have been buying Indian stocks consistently for last three weeks. Foreign investors are slowly but surely turning buyers in the Indian markets. Let's take a look at the charts and try to figure out what lies ahead for the markets in the coming week.

As we can see, Nifty surged past the all-important level of 25000 on Friday. This up move has come after a period of range bound activity over last couple of weeks. In all probability Nifty has broken out of its range and is headed towards 25500. As long as Nifty remains above 24800 it is a "Buy-On-Dips" market. A close below 24800 should open doors for further fall towards 24000. Coming week being expiry week for May derivatives contracts, may see a lot of volatility and a bout of short covering may propel Nifty towards its target in a jiffy.

BankNifty led the rally in the markets. However, it looks a bit fatigued right now. A move above 57000 is needed for BankNifty to scale further high levels. Immediate resistance for BankNifty is placed in 56300-56600 range. Move beyond 56600 should open the doors for 57800-58000 on BankNifty.

A word of caution for traders though. Traders MUST adhere to strict stoop losses. The moves can be sharp and wild given the expiry week as well as news flow from Isreal-Iran skirmish. Markets will provide ample opportunity to trade on both sides. Investors should look to accumulate good quality stocks in every dip. Select sectors are likely to outperform others with big margin, allocating more weightage to such sectors in the portfolio would be more rewarding over a period of time.

P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk.