Sensex, Nifty outlook for Monday: Domestic equity markets snapped a six-week consecutive decline to end on a strong note. Both the BSE Sensex and NSE Nifty 50 recorded weekly gains of about 5.8% each. 

The 30-share Sensex settled at 77,550.25, while the broader Nifty 50 closed at 24,050.60. In the final trading session of the week, both benchmark indices rallied over 1% to firmly finish in the green. 

However, Nifty futures on the NSE International Exchange were trading lower by 71.5 points, or 0.30%, at 24,020.0, hinting at a flat market opening.

Global cues

A temporary two-week ceasefire between the US and Iran brought immediate relief to geopolitical concerns and a drop in crude oil prices, falling below the $100 mark, easing market sentiment.

Domestic Institutional Investors (DIIs) maintained consistent buying through the week, injecting around Rs 21,600 crore, while there was pressure from Foreign Institutional Investors (FIIs), who pulled out over Rs 20,700 crore during the week, analysts noted.

The mid-week US-Iran ceasefire announcement was pivotal, and the underlying sentiment has seen a noticeable improvement compared to previous weeks, said Vinod Nair, Head of Research, Geojit Investments Ltd.

“Despite the RBI holding status quo on poilicy rates while lowering its FY27 growth outlook, and the FOMC minutes struck a hawkish tone, the sharp decline in Brent crude has meaningfully improved India’s macro positioning,” Nair said.

Ponmudi R, CEO of Enrich Money, warned that a confirmed bullish trend remains elusive. He said that the "lack of sustained follow-through suggests the market remains in a recovery phase rather than transitioning into a confirmed uptrend". 

“However, the limited duration of the truce has kept investors wary of a potential re-escalation, curbing aggressive positioning. Profit-taking at higher levels further capped gains,” Ponmudi said.

Nifty: According to Ponmudi, the index is currently stabilising in the 24,000–24,050 zone, with immediate resistance placed in the 24,100–24,350 range. A sustained breakout above this zone is required to extend the rally, while immediate downside support is seen near 23,700–23,600. Adding, Mishra noted the potential for further upside towards the 24,300–24,700 zone, advising that traders should maintain a positive stance as long as the index holds decisively above the key level of 23,500. 

Bank Nifty: Ponmudi said that the banking index is trading near the 55,900–56,000 zone, where the 56,000 mark remains a critical resistance area. Ponmudi placed key support for the index in the 55,200–54,800 zone. Meanwhile, Mishra said the index may retest its long-term moving average near 56,700, followed by a move towards 57,800.

Sensex: For the 30-pack index, Ponmudi said it is consolidating within the 77,300–77,600 range. He highlighted immediate resistance around 78,000–78,400 and expects strong downside support near 76,700–76,500.

Trading strategy ahead

Nair said that the Reserve Bank of India's decision to hold policy rates at 5.25%, combined with waning inflation fears, has softened domestic bond yields and renewed interest in rate-sensitive sectors, particularly banking.

Looking ahead, Mishra advised that portfolio allocation should remain tilted towards fundamentally strong large-cap stocks. With volatility expected to remain elevated, he recommended adopting a hedged strategy and focusing on stock-specific opportunities.

“However, caution is warranted in sectors exposed to input cost pressures amid elevated crude prices,” Mishra said.

Ponmudi added that until key resistance levels are convincingly reclaimed, a cautious approach and disciplined risk management remain warranted. He anticipated that markets are likely to remain range-bound and driven by news flow in the absence of clearer directional cues