Mumbai, May 23 (IANS): Indian equity markets closed the week on a positive note, with the Nifty gaining 0.32 per cent over the five sessions to settle at 23,719 and the Sensex advancing 0.24 per cent to close at 75,415 – up 231 points on the final trading day alone – as improving global cues around softening crude oil prices and reports of indirect negotiations between the United States and Iran lifted investor confidence. The IT sector emerged as the standout performer of the week, drawing fresh interest on the back of attractive valuations following a recent correction, while realty, cement, and private banks also held their ground reasonably well. In contrast, FMCG and consumer durables lagged as concerns over wholesale price index pass-through continued to weigh on margin expectations. Midcap and smallcap indices outpaced the benchmarks, with Nifty Midcap100 climbing 1.36 per cent and Nifty Smallcap100 adding 0.41 per cent during the week, suggesting broader market participation even as analysts cautioned that limited conviction at higher levels continued to cap the upside momentum for large-cap indices. The Indian rupee also found some relief during the period as a modest pullback in crude prices, driven by persistent diplomatic efforts to de-escalate Middle East tensions, eased pressure on the currency.
However, the overall mood remained one of cautious optimism rather than outright bullishness, with several macro headwinds keeping investors from making aggressive directional bets. Domestic bond yields faced upward pressure as fears of tightening monetary policy resurfaced amid expectations of higher input inflation, while the US 30-year Treasury yield climbed to its highest point since 2007 during the week – a development that reinforced concerns about a prolonged higher-for-longer interest rate environment globally and its potential to strain liquidity conditions and risk assets across emerging markets. Foreign institutional investors largely stayed on the selling side, with cumulative net outflows for the week tallying around Rs 7,570 crore, adding a note of caution to an otherwise resilient domestic market. On the technical front, market participants have flagged the 23,800–24,000 band as a formidable resistance zone for the Nifty 50, while the 23,400–23,300 range is seen as a critical support floor; for Bank Nifty, resistance is pegged near 54,200 with immediate support at 53,600–53,500. Looking ahead, investors are closely watching India’s April Index of Industrial Production data for signs of whether the recent softness in manufacturing is transitory, alongside the Reserve Bank of India’s June policy decision and the US core PCE print – a higher-than-expected PCE reading could push back Federal Reserve rate cut expectations and further dampen the prospects of meaningful foreign inflows into emerging market equities.