D-Street This Week: Nifty logs 3rd weekly gain, Nifty Bank up 3%

Even as benchmark equity indices continued to hit fresh highs this week on the back of positive global cues and supportive domestic macros, Sensex and Nifty ended the week to June 21 with minor gains of 0.28 per cent amd 0.15 per cent, respectively. Nevertheless, on a weekly basis, indices logged gains for the third straight week. Sensex finished the week lower by 0.35 per cent or 269.03 points at 77,209.9, while Nifty ended lower by 0.28 per cent or 65.9 points at 23,501.1 points.

The week culminated with a modest gain of 0.15 percent, reflecting overall stability and confidence in the market, said Osho Krishan, Senior Analyst - Technical & Derivatives, Angel One.

Nifty Bank index, which is a gauge of the banking sector performance, posted biggest weekly gain of 2024 and ended the week up by over 3 per cent, after notching fresh record highs of 51,957 during the week.

“Bank Nifty continues to shine amid short covering and value buying, supported by a strong Indian economy, robust balance sheets, and cheap valuations,” said Prashanth Tapse, Senior VP (Research), Mehta Equities. The index infact has witnessed the longest winning streak in 19 months and is up for the sixth straight week, taking monthly gains to over 7 per cent.

Nifty Midcap 100 and Nifty Smallcap 100 indices, which logged their fresh highs today, ended the week with gains of 0.37 per cent and 1.06 per cent, respectively.

"The Indian market initially continued its upward trend as concerns over election outcomes eased and global sentiment improved. With a coalition government in place, there is optimism that the upcoming budget will strike a balance between growth initiatives and populist measures. Additionally, expectations are high for government actions aimed at stimulating consumption, a critical area to focus on," said Vinod Nair, Head of Research, Geojit Financial Services.

Strong institutional inflows, including renewed interest from FIIs post-government formation, have further bolstered market sentiment. 

Sectoral gainers 

Sectorally, Private Bank and financial services led the gains, with Nifty Private Bank index ending higher by over 4 per cent, followed by the IT and metal indices.

Technical set-up

 From a technical standpoint, the small-bodied candle formations suggest that the bulls may be reaching their limit and could be waiting for an external trigger to continue their momentum. As the Nifty index ventures into uncharted territory, it becomes challenging to identify the intermediate resistance. However, with the recent developments, 23650-23700 seem to pose a significant challenge, and a decisive closure could potentially trigger the next leg of the index's rally, noted Krishnan. On the lower end, strong support is observed around 23400, which has proven its reliability in the previous week, followed by the crucial support of 23200-23100 (20 DEMA), he added.