Indian shares may open cautiously after Friday’s technology-led rally, with analysts warning that elevated oil prices, a weaker rupee and continued foreign selling could limit the recovery.
Indian equities are likely to open the new week with caution, even after a sharp rebound on Friday that lifted sentiment across the broader market.
The recovery was led by technology stocks after Tata Consultancy Services reported quarterly results, helping the Nifty 50 end 1.30% higher at 22,520.45 and the Sensex rise 1.23% to 72,472. Even so, market participants are still treating the move as a relief rally rather than proof that the recent slump has fully run its course.
According to the outlook published by Goodreturns, traders will remain focused on global risk conditions, crude oil prices, foreign institutional investor flows and the rupee. The report said the currency has weakened to 96.9 against the dollar, while Brent crude has stayed above $100 a barrel, a combination that can keep inflation concerns alive and temper risk appetite.
Siddhartha Khemka, head of research at Motilal Oswal Financial Services, said Indian equities are still facing elevated external pressures. Speaking to Goodreturns, he pointed to the weaker rupee, Brent crude around $103 a barrel and continued foreign selling as factors that could limit further upside. He also noted that oil prices remained firm even after US President Donald Trump suggested military action against Iran would not resume before the November midterm elections.
Technical analysts say the Nifty’s latest bounce has improved short-term sentiment, but not enough to declare a durable turnaround. Bajaj Broking Research said the index formed a strong bullish candle and snapped an eight-week losing streak, yet the weekly gain was modest and the market still needs stronger price action, together with more supportive macroeconomic conditions, to establish a sustained uptrend.
For the immediate session, 22,600 is being watched as a key barrier on the Nifty. A decisive break above that level could open the way towards 22,800 and then 23,100, according to Bajaj Broking Research. If the index fails to clear that zone, analysts expect it to remain range-bound between 22,200 and 22,600.
The banking index also ended the week on a firmer note, forming a bullish candle with a higher high and a higher low after the previous session’s pullback. Bajaj Broking Research said Bank Nifty is showing relative strength versus the broader market and closed near its high for the week at 55,419.30.
Analysts say a sustained move above 55,500 would strengthen the case for further recovery in bank shares, with potential targets near 55,900 and 56,200. If that threshold is not breached, the index may consolidate between 54,000 and 55,500. The 53,500-54,000 band remains an important support area, backed by the previous month’s low and a key retracement level from the earlier advance.
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