Stock Market Weekly Forecast: Sensex, Nifty Eye Cautious Gains; Key Support Holds, Rally Towards 25K Possible

The Indian stock market recently ended a six-week losing streak, buoyed by oversold conditions and positive global cues. The Nifty and Sensex indices gained around 1% over the week. However, the momentum was tempered by continuous foreign outflows. Foreign Institutional Investors (FIIs) sold nearly Rs 10,000 crore in the cash market, while Domestic Institutional Investors (DIIs) countered this with purchases worth Rs 19,000 crore.

Stock Market Weekly Outlook For August 18 to August 22

On Thursday, the Indian stock markets witnessed a relatively muted trading session, with benchmark indices closing marginally higher ahead of the extended weekend. The Nifty 50 index edged up by 11.95 points, or 0.05%, to settle at 24,631.30.

It is worth noting that markets remained closed on Friday, August 15, in observance of Independence Day, leading to reduced participation on Thursday as many traders chose to square off their positions ahead of the holiday.

"This week has been quite eventful for Indian markets, marked by strong macro developments, mixed earnings trends, and robust investor sentiment," says Mr. Jyoti Prakash, Managing Partner at AlphaaMoney.

One of the most significant highlights is that S&P Global upgraded India's sovereign credit rating from BBB- to BBB, with a stable outlook. "This reflects global confidence in India's economic trajectory and is a positive long-term signal for foreign investors looking at India," Mr. Prakash explains

Factors To Influence Dalal Street This Week

According to experts, various domestic and international factors will influence Dalal Street's movement in the coming week. Key influences include GST reforms announced by Prime Minister Narendra Modi during his Independence Day speech and the outcome of the Trump-Putin meeting in Alaska. Additionally, US Fed minutes, potential tariffs on India by Trump, favourable monsoon conditions, and record-low inflation are other significant triggers.

This week will see corporate actions from around 100 companies, including dividends and stock splits. Notable companies with record dates include JK Paper, Natco Pharma, and Coal India. Additionally, five mainboard IPOs and one SME issue are set to launch in the Indian primary markets.

Nifty 50 Prediction, August 18-22: How Nifty Will Trade Ahead?

The Nifty 50 index is likely to maintain a bullish tone this week as long as it stays above the key support level of 24,337. If the index holds above this level, traders can expect upward momentum to continue, with immediate resistance seen at 24,660 and 24,850. A breakout above the 24,750 zone could open the way for a fresh rally towards the 25,000 mark, supported by improved market sentiment.

On the flip side, if Nifty slips below 24,337, it could trigger renewed selling pressure, possibly dragging the index down to 24,200 or lower. The key breakout levels to watch this week are 24,800 on the upside and 24,400 on the downside, which are expected to guide the market's next decisive move. Overall, the trend remains positive, but a clear breakout is needed for sustained gains.

Santosh Meena from Swastika Investmart highlighted that despite foreign outflows, supportive global cues helped lift investor sentiment. The Nifty has established a strong base at 24,350 and formed a bullish engulfing candlestick pattern on the weekly chart.

Market analyst Ajay Bagga, in a conversation with ANI, suggested that a possible truce at the upcoming Alaska meeting between key global powers could trigger a relief rally in Indian markets next week. He noted that India stands to benefit significantly if tensions ease, particularly as it may lead to a weakening of the rationale behind secondary tariffs imposed on the country.

However, Bagga also cautioned against reading too much into short-term geopolitical developments. "Geoeconomics is more noise than signal, so any rally may be short-lived," he remarked.

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