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.