Market weekly wrap: Sensex, Nifty log weekly gain on FII support, ease in geopolitical concerns

Snapping a two-week-long losing streak, the Indian equities market closed on a positive note during the week ended June 20, despite volatility amid Middle East tensions and surging crude oil prices. The BSE Sensex and the NSE Nifty gained 1.6% each this week, reclaiming the crucial levels of 84,000 and 25,000, respectively, on the back of a strong rally on Friday amid ease in geopolitical concerns and the Reserve Bank of India’s decision to ease provisioning rules on infrastructure loans. Sustained buying by foreign institutional investors (FIIs) also supported the market as they infused more than ₹8,700 crore in Indian equities this week.

The benchmark indices, the Nifty and the Sensex, ended near the week’s high at 25,112.40 and 82,408.17, gaining 394 points and 1,290 points, respectively. After several weeks of gains, the broader indices—the mid- and the small-caps—saw profit booking in the week ended June 20 and ended lower by 0.4-1%.

After starting the week on a positive note on Monday, the domestic bourses witnessed consolidation over the next three days amid the escalated Israel-Iran conflict and a sudden spike in crude prices. However, the indices saw a strong rally on the last day of the week, aided by consistent buying from FIIs, positive macroeconomic indicators, and positive cues from the monsoon’s progress.

On the sectoral front, a mixed trend prevailed, as rate-sensitive sector indices, including auto, banking, financials, and realty, moved higher. Additionally, a recovery in the IT pack further strengthened the overall sentiment.

On the other hand, defensive sectors like FMCG and pharma underperformed amid the prevailing risk-on environment, while metals and energy witnessed some profit booking.

Key Market Drivers

The sustained buying by FIIs was one of the key drivers for the market this week as they injected ₹8,709 crore into Indian equities. FIIs made a net investment of ₹7,940.70 crore on June 20, the third-highest single-day inflow in 2025, according to provisional data. Overall, they remained net buyers for the fourth consecutive session, logging their longest streak of buying this month.

In contrast, domestic institutional investors (DIIs) made a net investment of ₹12,635 crore this week, including a sell-off of equities worth ₹3,049.88 crore on Friday.

The trend of Foreign Portfolio Investment (FPI) witnessed a cautiously optimistic pattern in June due to geopolitical tensions, including the conflict between Israel and Iran, alongside global uncertainties, said Vipul Bhowar, Senior Director - Listed Investments, Waterfield Advisors.

“Enhancing domestic fundamentals and a favourable long-term growth outlook indicate that, should global conditions stabilise, India may experience more sustained and stable foreign portfolio investment inflows in the future," he added.

Key events to watch next week

In the coming week, global cues will remain the dominant force, with a focus on geopolitical tensions between Israel and Iran, U.S. economic data, and commentary from the Federal Reserve officials. Any signs of easing U.S. inflation or a dovish tone from the Fed may further fuel the rally, said Ajit Mishra, SVP- Research, Religare Broking.

On the domestic front, investors will closely monitor the progress of the monsoon, volatility related to monthly expiry, crude oil price movements, and FII activity for further cues, he said.

Strategy ahead

With the Nifty approaching the upper boundary of its consolidation range, the focus should remain on sector-specific leadership and identifying stocks that are showing relative strength within those sectors. “A breakout above 25,200 may trigger fresh buying; however, traders should be cautious of false breakouts, especially amid heightened volatility due to the monthly expiry,” said Mishra of Religare Broking.

A stock-specific trading strategy is advisable, with preference given to sectors showing relative strength, such as banking, auto, realty, and IT, he said. “Meanwhile, traders should avoid aggressive positions in FMCG, energy, and the mid-cap and small-cap segments until there are clear signs of renewed buying interest.”

Mishra says that the Nifty has once again approached the upper band of its consolidation range. “A sustained move above the 25,200 level would confirm a breakout, potentially opening the door for a rally toward the 25,600–25,800 zone. On the downside, 24,700 and 24,400 will serve as immediate and crucial support levels.”

The banking index has demonstrated resilience, driven especially by renewed participation from private banking majors like HDFC Bank and ICICI Bank, which had been relatively inactive in recent weeks. The Bank Nifty has reclaimed levels above the 56,000-mark and could now gradually advance towards the 57,000 and 58,200 levels. On the downside, the 54,000–55,100 zone is expected to provide a cushion in case of a pullback, he said.