Broader indices outperform with muted gains; smallcaps jump up to 27%

Market This Week

The Indian broader market indices, BSE Mid and Smallcap, outperformed the main indices during a volatile week. The market witnessed high volatility during the week amid continued FII selling, the rupee's depreciation to a record low of over 91 against the US dollar, and uncertainty surrounding the US-India trade deal.

BSE Sensex index fell 338.3 points or 0.39 percent at 84,929.36, while Nifty50 index shed 80.55 points or 0.30 percent at 25,966.40.

Among sectors, Nifty Private Bank and Media indices lost 1 percent each, Nifty Auto, Nifty India Defence, and Nifty Bank shed 0.5% each. However, Nifty PSU Bank and IT indices added 1% each, while Nifty FMCG and Nifty Consumer Durables rose 0.5% each.

The Foreign Institutional Investors (FIIs) turned net buyers for the last three consecutive sessions of the week, but they remained net sellers for the week as they sold equities of only Rs 251.86 crore as compared to last week's selling of Rs 9,201.89 crore. On the other hand, Domestic Institutional Investors (DII) continued their buying in this week, also as they bought equities worth Rs 12,061.92 crore.

"Indian equities traded with a cautious tone for most of the week, weighed down by persistent FII outflows, rupee depreciation to record lows, and global uncertainties. Early sessions saw pressure from rising Japanese bond yields and expectations of BoJ tightening, which amplified risk-off sentiment across emerging markets," said Vinod Nair, Head of Research, Geojit Investments.

"Domestic benchmarks remained range-bound with a negative bias despite support from RBI’s currency stabilization efforts and optimism over H2FY26 earnings recovery. Mood turned firmer on Friday after a softer US CPI print boosted expectations of a milder Fed stance. Bargain hunting and lower crude prices helped large caps drive a late rebound, trimming most of the week’s losses."

"Markets are likely to maintain a cautiously positive bias but remain highly sensitive to global cues. Key drivers going forward include comments from the global central banks for the 2026 policy trajectory. While sentiment remains constructive, near-term volatility may persist amid uncertainty over trade deal timelines and INR stability," he added.

The BSE Small-cap index ended flat. Kothari Industrial Corporation, Wonder Electricals, Worth Investment & Trading, Vishnu Prakash R Punglia, Kamdhenu, Wardwizard Innovations and Mobility, Akzo Nobel India, and Gallantt Ispat shed between 12-22 percent. On the other hand, Reliance Infrastructure, Roto Pumps, Lloyds Enterprises, Bliss GVS Pharma, Gandhar Oil Refinery India, Rain Industries, Antony Waste Handling Cell, and DCX Systems added more than 15 percent.

After moving between two converging trend lines, the market eventually started to breakout of the triangle in the short-term.

The underlying trend of Nifty is positive. A sustainable move above the key overhead resistance of 26000-26050 levels could open the next upside target of around 26300 levels in the near term. Important lower supports to be watched at 25800-25700 levels.

We believe that the current market texture is range-bound. For the bulls now, 26,000/85000 would act as an immediate breakout zone. If it succeeds in trading above this level, then it could rally to 26,200/85600. Further upside may also continue, potentially lifting the index to 26,300–26,350/85900-86100. On the flip side, 25,850/84500 would act as a key support zone for traders. Below this level, the market could retest 25,700–25,600/84000-83700.

For Bank Nifty, the key support zones are 58,700 and the 50-day SMA, around 58,470. As long as it trades above these levels, the bullish sentiment is likely to continue. On the higher side, 59,700–60,000 could be immediate resistance areas for traders. However, if it falls below the 50-day SMA or 58,470, the uptrend would become vulnerable.

Technically, on the daily chart, Nifty formed a bullish candle and defended the 50-DEMA support at 25,775, as well as the swing low of 25,690—reflecting some relief for bulls. Major support lies in the 25,690–25,775 zone, while resistance stands at 26,100. A firm break above 26,100 could pave the way toward 26,250–26,300. Overall, the index is likely to consolidate in the 25,700-26,300 range in sthe hort term.

The Nifty has witnessed a breakout from a falling wedge pattern, indicating improving market sentiment. Additionally, the index has reclaimed the 21-day EMA on the daily chart. After finding support near the 50-day EMA, the index recovered towards the 26,000 mark.

Going forward, 26,000 will be a key level to watch; a decisive move above this level could propel the index towards 26,300. On the downside, immediate support is placed at 25,900, which is likely to act as the first line of defense for the Nifty.