Nifty ended last week 0.32% higher, mainly supported by IT stocks, while energy shares also contributed to the gains. As domestic markets reopen on Monday after a shortened trading week, several important developments are expected to influence investor sentiment. On Friday, the benchmark 50-share index slipped 64.60 points, or 0.27%, to settle at 23,719.30. Markets will remain shut on Thursday, May 28, for Bakri Eid.
Rupak De, Senior Technical Analyst at LKP Securities, said Nifty failed to close above the key resistance level of 23,800 for the second straight session despite a positive RSI crossover, indicating weak momentum. He noted that the index has remained range-bound over the past four to five sessions without any clear breakout or breakdown.
According to De, support is seen at 23,600, with a fall below this level possibly taking the index to 23,400. A break below 23,400 could lead to a sharper correction. On the upside, crossing 23,800 decisively may trigger fresh gains in the short term.
Iran-Israel tensions
Geopolitical developments remain under watch as diplomatic efforts continue amid tensions in the Middle East. Iran’s chief negotiator and Parliament Speaker Mohammad Bagher Qalibaf met Pakistan Army Chief Asim Munir in Tehran, according to Iranian media reports. Munir also met Iranian President Masoud Pezeshkian and Foreign Minister Abbas Araqchi during his visit.
US markets
Wall Street ended higher on Friday as easing treasury yields supported technology and large-cap stocks. Investors also monitored developments related to the Middle East situation.
The Dow Jones rose 294.04 points, or 0.58%, to 50,579.70. The S&P 500 gained 27.75 points, or 0.37%, to close at 7,473.47, while the Nasdaq Composite slipped 50.87 points, or 0.19%.
Bond market trends
Global investors continue to monitor bond markets amid renewed inflation concerns. The yield on the 30-year US Treasury touched 5.201% on Wednesday, its highest level since 2007, before easing to 5.0795%.
Investor sentiment towards equities weakened globally. US equity funds saw outflows of $12.05 billion during the week, marking the second withdrawal in three weeks. Asian funds recorded outflows of $570 million, while European funds attracted inflows of $4.62 billion.
Technology funds remained popular for the seventh consecutive week, drawing $6.94 billion. Meanwhile, financial and industrial funds saw withdrawals of $2.8 billion and $1.3 billion respectively.
Crude oil
Crude prices will remain important for domestic markets. US WTI crude futures ended at $97 per barrel, down 0.67%, while Brent crude rose $1.67, or 1.63%, to close at $103.54 per barrel.
FII and DII activity
Foreign investor activity will remain in focus. On Friday, foreign institutional investors sold shares worth Rs 4,440.47 crore, while domestic institutional investors bought shares worth Rs 6,003.53 crore.
FIIs have sold domestic equities worth Rs 2.22 lakh crore so far in 2026 and have remained net sellers for three straight months. This month alone, they have sold shares worth Rs 30,374 crore.
Technical outlook
Nilesh Jain, Head of Technical and Derivative Research at Centrum Finverse, said Nifty formed a small bullish candle on the weekly chart and stayed above its 50-day moving average near 23,690, which could act as immediate support. The next support level is around 23,500.
He said a breakout above 23,800 may trigger a rally towards 24,000 and beyond. He expects Nifty to move within the 23,500–24,000 range with a positive bias, while volatility may remain high due to the monthly F&O expiry.
India VIX fell nearly 5% during the week and closed below 18, which could support market sentiment if volatility continues to ease.
Rupee movement
The rupee strengthened to close at 95.69 against the dollar on Friday, gaining 0.5%, helped by intervention from the Reserve Bank of India. The RBI reportedly sold between $2 billion and $3 billion on Thursday and continued intervention on Friday.
State-run banks were also seen selling dollars and conducting dollar-rupee swaps, likely on behalf of the RBI. This helped stabilise the currency despite higher crude oil prices.
The rupee had weakened from 94.50 on May 8 to a record low of 96.96 on May 20.
Stocks to watch
Oil marketing companies may remain in focus after petrol and diesel prices were raised for the third time in under two weeks. The government said India had absorbed higher global oil prices for 76 days after the US-Iran conflict began, with the total increase remaining below Rs 5 per litre.
Several stocks will also be watched due to corporate actions. Companies including Havells India, Trident, LTM, Siyaram Silk Mills, Tata Consumer Products, Tata Consultancy Services, ITC, Torrent Pharmaceuticals, Bajaj Auto, UNO Minda and Bank of India have dividend record dates during the week.
Zydus Lifesciences, CyberTech Systems and Software, and Dhanuka Agritech have buyback record dates, while Life Insurance Corporation of India has a bonus issue record date on May 29.
