Key facts
- Indian stock markets rallied sharply on Friday, with Sensex and Nifty gaining approximately 2% each.
- Sensex closed at 75,527.95, up over 1,695 points, while Nifty50 ended at 23,622.90, up over 461 points.
- The rally boosted the combined market capitalization of BSE-listed companies by around Rs 10 lakh crore.
- Analyst Sudeep Shah noted a bullish setup for Nifty, with potential upside towards 23,800 and 24,000.
- Bank Nifty confirmed a breakout from a symmetrical triangle pattern and is expected to test 57,500 and 58,300.
- Nifty IT index exhibits a weak technical structure, with a downside support zone at 27,050–27,000.
- A bullish divergence between Nifty's price and PCR, along with improving derivatives data, suggests a potential pullback rally.
Indian stock markets experienced a significant rally on Friday, with the Sensex and Nifty50 indices each gaining approximately 2%. This surge, adding around Rs 10 lakh crore to the total market capitalization of BSE-listed companies, was attributed to improved global sentiment, hopes of a US-Iran peace deal, and a correction in crude oil prices.
Analyst Sudeep Shah of SBI Securities noted that the Nifty, after a volatile week, found strong support near the 61.8% Fibonacci retracement level, forming a solid base that led to Friday's rebound. He highlighted that the index closed above its 20-day EMA for the first time since May 2026, with momentum indicators turning favorable. Shah anticipates the Nifty could extend its upward move towards 23,800 and potentially the 24,000 mark, with support at 23,350–23,300.
The banking benchmark, Bank Nifty, was identified as a strong outperformer, having confirmed a breakout from a symmetrical triangle pattern. Trading above key moving averages with strengthening momentum, Bank Nifty is expected to test 57,500 and 58,300, with support around 56,200–56,000.
In contrast, the Nifty IT index shows a weak technical structure, trading below its moving averages with bearish momentum indicators. The index faces resistance at 28,250–28,300 and could see further weakness if it breaks below the 27,050–27,000 support zone.
Shah also pointed to a bullish divergence between the Nifty's price action and its Put-Call Ratio (PCR), indicating waning bearish momentum. This, coupled with improving FII derivatives positioning and market resilience to geopolitical news, suggested a potential pullback rally was likely even before the US-Iran deal discussions.
Regarding specific stocks, Shah offered a cautious outlook on HDFC Bank, noting improving momentum but awaiting confirmation of a trend reversal. He also addressed the volatility seen in HFCL and Sterlite Tech.