From Caution to Confidence: Stock Market Soar As Indices Hit 9-Month Highs This Week

After a cautious start, indices gained traction midweek as tensions between Iran and Israel appeared to ease, and global risk appetite returned.

Domestically, high-frequency data such as IIP and PMI figures will be in focus, along with monsoon progress and FII activity, to gauge short-term market trends, said experts.

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The Indian stock markets finally ended their five-week-long consolidation phase, driven by improving global sentiment, easing geopolitical concerns, and noticeable buying by foreign institutional investors (FIIs) in the latter part of the week, analysts said on Saturday.

After a cautious start, indices gained traction midweek as tensions between Iran and Israel appeared to ease, and global risk appetite returned.

Consequently, the benchmark indices Nifty and Sensex closed near their weekly highs at 25,637.80 and 84,058.90, respectively.

“The rally was underpinned by a combination of easing Middle East tensions and a strong rebound in FII inflows. The fragile truce between Iran and Israel held throughout the week, calming geopolitical nerves and boosting investor confidence,” said Ajit Mishra, SVP, Research, Religare Broking Ltd.

On the domestic front, progress in the monsoon, subdued crude oil prices, and stable macroeconomic indicators supported the bullish undertone. FII inflows accelerated, with over Rs 12,000 crore infused in a single day, further strengthening market sentiment, he mentioned.

On Friday, benchmark indices touching a nine-month high. The Sensex climbed 303.03 points, or 0.36 per cent, to close at 84,058.90. It traded within a range of 83,645.41 to 84,089.35 during the day.

This suggests that investors are feeling more confident about market stability in the near term.

A majority of sectors participated in the upmove, with metals leading the gains, followed by financials, energy, and banking. IT stocks also witnessed a recovery and ended flat, supported by bargain hunting and favourable global cues.

In contrast, the realty pack saw profit booking amid the prevailing consolidation and ended marginally lower. Interestingly, broader indices attracted significant buying interest, reflecting a risk-on sentiment, and gained in the range of 2.4 per cent to 4.3 per cent over the week, said market experts.

According to Vinod Nair, Head of Research, Geojit Investments Limited, Indian equity benchmarks staged a sharp rebound this week, reversing early volatility to close on a firm footing.

“The rally was underpinned by easing geopolitical tensions in the Middle East and a steep decline in crude oil prices, which buoyed investor sentiment across sectors. Broad-based buying lifted the indices, though gains were tempered by underperformance in the IT pack,” he mentioned.

As the first-quarter earnings season draws near, investors are turning their focus to corporate results for early indications of growth trends. There is also heightened anticipation around trade agreements that the United States is expected to finalise with major global partners in the coming week.

Looking ahead, global cues will continue to drive market direction. Despite improved sentiment, caution persists regarding potential tariff escalations, with U.S. tariffs scheduled to resume from July 9 and updates on trade agreements will remain in focus.

Domestically, high-frequency data such as IIP and PMI figures will be in focus, along with monsoon progress and FII activity, to gauge short-term market trends, said experts.

(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)