Momentum Builds, but Will It Hold? Key Factors to Watch in the Week Ahead

Mumbai, 19 May – Indian markets regained strength last week as tensions between India and Pakistan eased and global tariff worries cooled down. Lower crude oil prices and continued buying by foreign investors helped the NIFTY50 rise over 4%, ending the week just above the 25,000 mark.

The broader market showed even stronger gains. The NIFTY Midcap 100 jumped 7%, marking its best weekly gain in two months, while the NIFTY Smallcap 100 surged nearly 9%. Among sectors, Defence led with a sharp 17% gain, followed by Real Estate and Metals, which also saw healthy jumps.

Market participation was broad, with more than 90% of NIFTY50 stocks trading above their 50-day moving averages. While this suggests strong underlying demand, such high levels can sometimes lead to a pause or short-term profit-taking.

Foreign Institutional Investors were cautious, switching between short selling and buying in futures markets. But in the cash market, they remained net buyers with purchases of ₹3,295 crore. Domestic Institutional Investors also supported the rally, buying shares worth ₹11,647 crore.

Technically, the NIFTY50 showed strong signs of recovery by reversing last week’s downward pattern and closing above recent highs. The key support level is around 24,500, and resistance is expected near 25,300. Moving beyond these levels will be important to watch.

Things to watch for in the week
Q4 Earnings Reports:
The final phase of quarterly results begins, with companies like Petronet, DLF, Power Grid, Bharat Electronics, Hindalco, ONGC, IndusInd Bank, ITC, and others set to announce their numbers. Their performance will offer clues about how different sectors are faring.

U.S. Economic Indicators:
The latest U.S. data on manufacturing and services will be released this week. April’s numbers showed slower growth, with manufacturing barely expanding and services growing at their slowest pace in over a year. These figures could influence global market sentiment.

Crude Oil Prices:
Oil prices rose again last week, helped by a temporary easing of U.S.-China trade tensions. However, expectations of increased supply from Iran and OPEC+ may cap further gains. Oil price moves will be closely watched as they affect inflation and investor confidence.

Bottomline:
The NIFTY50 has made a strong comeback, climbing over 14% from its April lows. Although the recent rise is encouraging, the market may pause to consolidate before making its next move. Watching the support at 24,500 and resistance near 25,300 will be key to understanding future direction. With earnings, economic data, and oil prices shaping sentiment, investors should stay alert to these triggers in the week ahead.