Weekly wrap: Sensex, Nifty extend gains for third straight week; key technical levels to watch

The Indian stock markets extended their bull run for the third consecutive week, with the benchmark indices gaining over 1% amid trade talk optimism and sustained foreign fund inflows. During the holiday-shortened week ended May 2, the BSE benchmark Sensex gained 1,289 points, or 1.6%, to settle at 80,502, and the NSE Nifty50 added 307 points, 1.3%, to close at 24,347. Underperforming benchmark indices, the broader markets ended mixed, with the BSE Midcap gaining 0.4% and the BSE Smallcap closing lower by 1.3%.

The market rally was capped due to investor caution amid rising geopolitical tensions between India and Pakistan and profit booking at higher levels. According to analysts, any further escalation along the Line of Control (LoC) could affect risk sentiment and trigger a flight to safety among investors.

Foreign portfolio investors (FPIs) maintained their buying stance in Indian equities, injecting ₹10,000 crore into the cash market this week amid a potential trade agreement with the U.S. and expectations of a corporate earnings recovery heading into FY26. The month of April saw net positive FPI inflows of ₹4,223 crore, which was for the first time in 2025, as per NSDL data. Overall, foreign investors sold equities worth ₹1.12 lakh crore in calendar year 2025, which includes outflows of ₹3,973 crore in March, ₹34,574 crore in February, and ₹78,027 crore in January 2025.

Caution to prevail in the near term, say analysts

The domestic markets are expected to remain cautious in the near term amid ongoing geopolitical tensions, although a sharp correction is not currently anticipated, says Vinod Nair, Head of Research, Geojit Financial Services.

Globally, easing trade tensions between the U.S. and China, coupled with a weakening U.S. dollar, are seen as medium-term positives for emerging markets such as India. However, the recent decline in Q1 U.S. GDP growth adds a layer of uncertainty, said Nair.

“In this context, upcoming comments from the Federal Reserve Chair on interest rates and inflation during next week’s FOMC meeting will be closely watched and could significantly influence market direction," Nair added.

Technically, the Nifty continues to display signs of hesitation at elevated levels, repeatedly getting knocked back from crucial resistance zones and producing intraday fake-outs, indicating a period of consolidation amid fading momentum, said Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities.

“This marks the seventh consecutive session where the Nifty has been locked in a choppy range, failing to conquer overhead resistances, underscoring persistent supply pressure and an undercurrent of caution in the broader market mood,” said Dhameja.

Market outlook

Going ahead, the Nifty is expected to extend consolidation in the range of 24,550-23,800. “We believe the current consolidation will help the index work off the overbought condition developed after the recent strong rally. Stock specific action will continue to remain in focus as we progress through the Q4 earnings season,” Bajaj Broking said in a note.

The brokerage house said that volatility is expected to stay elevated due to ongoing geopolitical tensions, developments related to tariffs, and the unfolding Q4 earnings season and major U.S. economic data points.

Amol Athawale, VP- Technical Research, Kotak Securities, opines that 24,200 and 79,900 would act as a sacrosanct support zone for the Nifty and Sensex, respectively. Above this level, the market could continue its positive momentum up to 24,600–24,800/81000-81700. On the flip side, below 24,200/79900, the uptrend would become vulnerable. Falling below this level, the chances of hitting the 200-day SMA or 24,050/79500 would increase. Further downside may also continue, potentially dragging the index down to 23,900/79000, he added.