Market logs biggest weekly gain in 4 years; Sensex rallies 3,000 pts, Nifty reclaims 23,350; is the worst over?

Indian equities extended its bullish run for a fifth consecutive session on Friday, with benchmark indices BSE Sensex and NSE Nifty registering their best weekly performance in four years, each rallying over 4%. The momentum in the market was driven by combination of domestic and global factors along with the return of foreign institutional investors (FIIs) amid attractive valuations. In a major boost to the market, FIIs logged their highest net purchase of 2025 on March 21, with net equity buying of ₹7,470.36 crore.

During the week ended March 21, the 30-share Sensex surged 3,076 points, or 4.17%, to 76,905, and the Nifty50 jumped 953 points, or 4.26%, to 23,350 level. With this, the equity benchmarks recorded their biggest weekly gain since February 2021.

Outperforming the benchmark indices, the broader market zoomed up to 8% this week. For the week, the Midcap 100 index gained 7.74%, losing its best weekly performance since April 2020. Similarly, the Smallcap 100 index surged 8.64% to post its strongest weekly gain since June 2020.

On the sectoral front, all the major indices ended in green zone, with the capital market and defense indices gaining the most. The capital market surged 14%, and the Defense index jumped 10%.

"The anticipated reduction in risk-free rates, coupled with the correction in the dollar index are facilitating fund flows back to EMs. FIIs, whose selling activity has been waning, are becoming net buyers, driven by dovish signals from the U.S. Fed, which suggest the possibility of two rate cuts this year. This has reignited optimism in the domestic market,” says Vinod Nair, Head of Research, Geojit Financial Services.

He further said that despite global uncertainty from escalating trade tensions, improving domestic macroeconomic indicators, valuation corrections, and anticipated earnings growth are encouraging investors to seek bargains.

Tracking firm cues from equity market and strong foreign capital inflows, the Indian rupee extended its upward move for the eighth straight day. It appreciated by 40 paise to 85.97 against the U.S. dollar, hitting its two-month high level.

Nifty maintains uptrend, eyes 23,800 level

Having surpassed the initial hurdle of the downward-sloping trend line, Nifty is facing immediate resistance at the 200-day exponential moving average (EMA) of 23,400. “If this hurdle is surpassed, markets could advance toward the next resistance level of 23,800 in the near term. Support for the Nifty has shifted upward to the 23,200-23,250 band,” says Devarsh Vakil - Head of Prime Research, HDFC Securities.

Echoing the same, Ajit Mishra, SVP, Research, Religare Broking, opines that Nifty has now approached its critical resistance around the moving averages ribbon at 23,400. “A decisive breakout above this level could further fuel momentum, potentially driving the index towards the 23,800-24,100 range. On the downside, the 22,750-23,000 zone is expected to serve as crucial support.”

During the week, the Nifty and Sensex successfully cleared the short-term resistance of 22,700 and 75,000, and post-breakout, the positive momentum intensified. It also surpassed the 20 and 50-day Simple Moving Averages (SMA), which is largely positive, says Amol Athawale, VP – Technical Research, Kotak Securities.

In the near future, 23,100 and 75,800 and the 50-day SMA or 23,000 and 75,400 would act as key support zones for Nifty and Sensex, while 23,500-23,700 and 77,400-78,000 could be the key resistance areas for the bulls. However, if it falls below 23,000 and 75,400, the sentiment could change, and traders may prefer to exit from their long positions, he said.

For the Bank Nifty, it rallied over 5% last week and is currently trading comfortably above the 50,000 mark. “For the trend, traders should consider 50,000 and 49,700 as key support zones, while the 200-day SMA at 51,000 and 51,300 could serve as crucial resistance areas for positional traders,” he added.