Indian stock market: How are Sensex and Nifty 50 likely to perform next week amid ongoing US-Iran war?

Indian stock market: The Indian stock market ended the week slightly lower, bringing a four-week winning streak to an end as renewed geopolitical tensions in West Asia and a sharp rise in crude oil prices weighed on investor sentiment. The week began on a strong note, supported by softer oil prices, upbeat Q1 business updates, steady monsoon progress, and broad-based buying across sectors. However, markets came under pressure mid-week after escalating Iran-US tensions sparked a sharp sell-off, although benchmark indices recovered a significant portion of those losses in the final two trading sessions.

The late-week recovery was driven by improving global cues and stronger-than-expected quarterly results from TCS, which set a positive tone for the Q1 FY27 earnings season. While benchmark indices ended the week in the red, the broader market remained resilient and continued to outperform.

For the week, the Sensex fell 0.25% to close at 77,569.39, while the Nifty declined 0.26% to settle at 24,206.90. Meanwhile, the Midcap and Smallcap indices advanced more than 1% each, highlighting continued stock-specific buying beyond the benchmark stocks.

According to Vinod Nair, Head of Research, Geojit Investments Limited, markets will closely track Q1FY27 earnings and the domestic inflation print, while global investors focus on US core inflation data and commentary from Federal Reserve officials.

“Despite the hawkish tone of the recent FOMC meeting, easing inflationary pressures and slowing growth across the U.S., EU, and China have strengthened expectations of a more accommodative monetary policy stance. At the same time, easing geopolitical tensions and further moderation in crude oil prices could provide an additional boost to the sentiments toward Indian equities. Sustained earnings outperformance in Q1FY27 is likely to reinforce confidence in the FY27 corporate earnings outlook, which could help catalyse a recovery in FII inflows,” Nair said.

Ajit Mishra – SVP, Research, Religare Broking, believes that near-term volatility may persist due to developments in West Asia and fluctuations in crude oil prices; the underlying domestic fundamentals remain supportive.

“Investors should continue to focus on companies with strong earnings visibility, healthy balance sheets, and improving relative strength,” he said.

He further recommended that investors maintain disciplined position sizing, avoid excessive leverage, and adhere to prudent risk management practices, given the potential for sharp market swings around earnings announcements and geopolitical developments.

On the Sensex outlook, Ponmudi R, CEO - Enrich Money, said that the index witnessed steady buying interest throughout the session and remained resilient after reclaiming key short-term levels. From a technical perspective, the 77,800–78,000 zone is likely to act as the immediate resistance area. A sustained breakout above this band could reinforce bullish momentum and pave the way for an advance towards the 78,400–78,600 region.

“On the downside, the 77,300–77,200 zone is expected to provide immediate support, followed by the 77,000 psychological level, which remains a crucial support area. Holding above these levels will be important to preserve the ongoing recovery structure, while a decisive break below 77,000 could trigger renewed profit booking and drag the index towards the 76,700–76,500 region. Overall, the near-term technical outlook remains cautiously positive,” Ponmudi said.

On the Nifty 50 outlook, Mishra of Religare Broking said that the index witnessed heightened volatility during the week but managed to recover from lower levels, indicating buying interest on declines. The index continues to trade above its key medium-term moving averages, suggesting that while momentum has moderated, the broader trend remains positive.

“Immediate support is placed in the 23,800–24,000 zone, followed by a stronger support base around 23,650. On the upside, the 24,400–24...