Week Ahead

On Friday, the Nifty 50 rose 42 points to close at 22,531 following a late-session rally that helped end five consecutive sessions of losses. The BSE Sensex gained 76 points to close at 73,961, although both indices were down 1.9 percent each for the week. In the broader markets, the Nifty Midcap 100 and Smallcap 100 indices gained half a percent each while falling over a percent each for the week.

Bulls would start the week on an upbeat note with exit polls forecasting an emphatic win for the NDA alliance on June 4, ending weeks of speculation that the numbers were likely to disappoint the market.

Adding to that, the strong Q4 GDP numbers announced post-market hours on Friday, the benchmark Nifty appears set to hit a fresh all-time high shortly.

The next domestic event to watch out for would be the outcome of three-day Monetary Policy Committee (MPC) meeting, due on June 7. Most experts expect the policy rates to remain unchanged and the focus will be mainly on the RBI governor commentary. According to them, the rate cut may not happen before Q4-2024 given the central bank's own inflation trajectory and persistent upside surprises in growth.

Foreign institutional investors activity will also be a key factor to watch going ahead. Most experts expect the FIIs to comeback, after their significant outflow in the past couple of months, citing the likely political stability, strong economic growth, and manageable inflation in India, although US interest rates.

Technically, the market seems to be poised for further upward journey in the coming week, considering the Nifty 50 holding the mid of Bollinger band (or 20-day SMA) as well as defending 50 percent Fibonacci retracement level (from the low of 21,821 to record high of 23,111, in May) for another session on Friday, especially ahead of exit polls which now are likely to strengthen the chart structure.

Most experts are hoping for gap-up opening and record high journey for the market on Monday and the continuation of higher highs-higher lows on the longer timeframes. According to them, the Nifty 50 is likely to climb above the upper end of Rising Channel (placed at 23,150-23,200 area) in the coming week, with crucial support at 22,300.