Indian stock markets are poised for a week influenced by a mix of domestic and global factors. The Nifty 50 index concluded the previous week with a 1.2% gain, closing at 24,741.00, driven by positive macroeconomic data and GST reforms. The Bank Nifty, however, remained almost flat, ending at 54,114.55.
Trade Setup for Monday
For the Nifty 50, the immediate resistance lies in the 24,950–25,000 zone, while support is around 24,550–24,500. A decisive breakout beyond these levels could dictate the index's next directional move. The 54,500–54,600 zone will likely act as immediate resistance for Bank Nifty. According to Rupak De, senior technical analyst at LKP Securities, the trend for Nifty 50 looks sideways to slightly positive. Nifty might move towards 25,150 to 25,250 in the short term if it moves decisively above 24,750. On the lower end, there is support at 24,500.
Global and Domestic Factors
The coming week is data-heavy, both domestically and globally. Investors will closely monitor India's August inflation data, bank credit and deposit growth, and forex reserves. Globally, key US data releases, including consumer inflation expectations, PPI, CPI, jobless claims, and consumer sentiment, will be critical in shaping Federal Reserve policy expectations.
US Fed Rate Cut
The Federal Reserve's interest rate policy has a strong influence on equity markets. Historically, stock markets have performed well during rate-cutting cycles. The market has not fully priced in the potential positive impact of these cuts. Investors anticipate two 0.25% rate cuts in the final months of 2025, with more expected in 2026. Lower interest rates typically boost stock valuations. The futures market indicates a high probability of a Fed rate cut in September.
India-US Trade Deal
Any developments regarding the India-US trade deal could further bolster market sentiment. A successful trade deal could eliminate tariff barriers on key Indian exports such as pharmaceuticals, IT services, and textiles, boosting investor confidence and FII inflows. Conversely, failure to reach an agreement could lead to increased tariffs and negatively impact the Indian economy and stock market. The US has been seeking greater access to Indian agricultural markets, which remains a sticking point in negotiations.
Stocks to Watch
Market experts have recommended several stocks for potential intraday gains:
Sumeet Bagadia recommended buying three stocks: Dr Reddy's Laboratories Ltd, Cholamandalam Investment, and Reliance Industries Ltd.
Overall Market Sentiment
Despite a flat close on Friday, the sentiment remains mildly positive, with key indices rebounding from intraday lows. Broader markets are outperforming, with strong mid- and small-cap participation. FIIs were net sellers, while DIIs provided a cushion with steady inflows. Nifty is expected to consolidate within the 24,400–25,000 range in the coming week.
