Weekly wrap: Sensex rallies 1,275 pts, Nifty reclaims 24,000; investors gain ₹15.5 lakh cr as FIIs pump in ₹3,400 cr

Indian equity markets ended the week on a strong note, with benchmark indices gaining over 1.6%, supported by easing crude oil prices amid improving geopolitical sentiment, renewed foreign fund inflows and robust gains in broader markets.

For the week, the BSE Sensex advanced 1,274.95 points, or 1.68%, to close at 76,802.90, while the NSE Nifty 50 rose 390.20 points, or 1.65%, to settle at 24,013.10.

Investor wealth surged by ₹15.53 lakh crore as the total market capitalisation of BSE-listed companies increased to ₹477.53 lakh crore from ₹462 lakh crore in the previous week.

The benchmark indices ended higher during the first four trading sessions of the week as sentiment improved amid easing geopolitical concerns, softer crude oil prices and strengthening global risk appetite. However, the rally lost momentum on Friday as heavy selling in information technology stocks followed Accenture's cut in its revenue growth guidance.

Foreign institutional investors (FIIs) returned as net buyers after weeks of volatility, purchasing equities worth ₹3,386.33 crore. Domestic institutional investors (DIIs) also remained supportive, investing ₹7,107.89 crore during the week.

Broader markets significantly outperformed the benchmark indices. The Nifty Midcap 100 index climbed nearly 3%, while the Nifty Smallcap 100 index advanced 3.2%.

Broader markets outperform

Among sectors, all major indices ended higher except information technology. The Nifty India Defence index emerged as the top performer, rising 6.5%, followed by Nifty Consumer Durables, which gained 6.4%, Nifty Realty, up 5.5%, and Nifty Capital Markets, which advanced 4.2%. The Nifty IT index declined 1.3%, weighed down by weak guidance from global technology services firm Accenture.

The Indian rupee also staged a recovery, appreciating by 78 paise during the week to close at 94.33 against the US dollar.

According to Vinod Nair, Head of Research at Geojit Investments, the rally was driven by improving global risk sentiment and a sharp decline in crude oil prices.

"Domestic equities posted a broad-based recovery through the week, reflecting renewed risk appetite across the market-cap spectrum, with small- and mid-cap indices outperforming large caps by a meaningful margin," Nair said.

He noted that Brent crude prices falling below $80 per barrel on hopes of a potential US-Iran peace agreement acted as a major trigger for the rally. However, profit booking emerged towards the end of the week following reports of disruptions in diplomatic negotiations.

Siddhartha Khemka, Head of Research (Wealth Management) at Motilal Oswal Financial Services, said investors also cheered signs of easing geopolitical tensions after the US and Iran signed a 14-point memorandum of understanding aimed at restoring commercial shipping and reopening the Strait of Hormuz.

Monsoon, crude, geopolitics in focus

At the same time, market participants remained watchful of the monsoon situation, with cumulative June rainfall tracking nearly 38% below normal amid El Niño conditions. Any prolonged delay in rainfall could raise concerns over kharif sowing, food inflation and rural demand.

Looking ahead, analysts expect geopolitical developments, monsoon progress and key macroeconomic data releases to guide market direction.

Ponmudi R, CEO of Enrich Money, said investor focus in the coming week will remain firmly on developments surrounding the U.S.-Iran peace process.

"Markets are likely to remain highly sensitive to developments on the geopolitical front, with any further progress expected to provide additional support to global risk sentiment," he said.

Meanwhile, brokerage Emkay Global warned that the recent rally could face near-term headwinds from delayed monsoons, elevated crude prices and weakness in the technology sector. However, it maintained a constructive view on equities, stating that any correction should be viewed as a buying opportunity.

With foreign investors returning, domestic institutions continuing to buy and geopolitical tensions showing signs of easing, market sentiment has improved significantly. However, the trajectory of crude oil prices, monsoon developments and global monetary policy will remain key factors in determining whether the rally can sustain in the weeks ahead.

(DISCLAIMER: The views and opinions expressed by investment experts on fortuneindia.com are either their own or of their organisations, but not necessarily that of fortuneindia.com and its editorial team. Readers are advised to consult certified experts before taking investment decisions.)