Indian Stock Market Outlook: Nifty 50 and Sensex Forecast for May 25

Indian Stock Market Benchmark Indices Expected to Open Higher on Monday

The Indian stock market benchmark indices, Sensex and Nifty 50, are likely to open higher on Monday, following upbeat global market cues on signs of the US-Iran peace deal boosting investor sentiment. The trends on Gift Nifty indicate a gap-up start for the Indian benchmark index, with the Gift Nifty trading around 23,961, a premium of nearly 217 points from the Nifty futures' previous close.

Indian Stock Market Ends Higher on Friday

On Friday, the Indian stock market ended higher, with the benchmark Nifty 50 closing above 23,700 level. The Sensex gained 231.99 points, or 0.31%, to close at 75,415.35, while the Nifty 50 settled 64.60 points, or 0.27%, higher at 23,719.30.

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Technical Analysis for Sensex

Sensex formed is witnessing positive consolidation near the 50-day Simple Moving Average (SMA) on daily charts. Last week, Sensex rose 0.24% and formed a bullish candle on weekly charts. According to Amol Athawale, VP Technical Research, Kotak Securities, the 50-day SMA or 75,400 would act as an immediate support zone. As long as Sensex remains above this level, the positive sentiment is likely to continue. On the higher side, 75,900 could act as an immediate resistance for the bulls. A successful breakout above 75,900 could push the index up to 76,400 - 77,000.

Technical Analysis for Nifty 50

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Nifty 50 formed small bullish candles on the daily and weekly charts. According to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, a small bullish candle was formed on the daily chart on Friday beside the negative candle of Thursday. The short-term chart pattern signals continuous testing of key overhead resistance around 23,850 with the rising low formations. This is a positive indication.

Technical Analysis for Bank Nifty

Bank Nifty index rallied 615.95 points, or 1.15%, to close at 54,055.35 on Friday, forming a strong bullish candle on the daily chart. On the weekly timeframe, Bank Nifty gained 0.64% and formed a bullish piercing line pattern, signalling a potential shift in sentiment after the recent consolidation phase. According to Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, the immediate resistance for Bank Nifty is placed in the 54,400 - 54,500 zone. Any sustainable move above this zone could result in Bank Nifty extending its pullback towards 54,900, followed by 55,300 in the short term.

Market Outlook

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, as noted by Nilesh Jain, VP- Head of Technical and Derivative research, Centrum Finverse Ltd. He expects the Nifty 50 to trade within a broader range of 23,500 – 24,000 with a positive bias.