Stock Market Update: Nifty 50, Sensex Eye Steady Start as Markets React to RBI Policy Support

Indian equity markets are likely to open Monday’s session on a muted note. The trends on GIFT Nifty show it is trading at 26,313 with a discount of 20 points from its previous Nifty futures’ close.

On Friday, domestic benchmarks extended gains after the RBI’s policy review, with Nifty 50 closing above 26,100, supported by broad buying across financials, autos and metals. The Sensex advanced 447.05 points (0.52%) to 85,712.37, while the Nifty 50 added 152.70 points (0.59%) to close at 26,186.45, supporting positive sentiment after the central bank’s rate cut.

Sensex Outlook

The Sensex has formed a general Reversal Pattern on the Daily chart and remains above the 20-Day Simple Moving Average (SMA). The Support seems to be located between 85,000-84,700. As long as the index stays in this range, the general market sentiment should be positive.

Resistance 1 is at 85,900. If the index breaks above this level, then it will have the potential to reach 86,500. On the downside, if the index breaks below 84,700, then the index could decline to 84,200-84,000 levels as the index is likely weak.

Nifty 50 Outlook

The Nifty 50 finished last week with a slightly negative movement of -0.08% and ended a three-week streak of positive returns. The immediate resistances appear to be in the range of 26,300-26,500.

If the Nifty 50 closes above the 26,250-26,300 range of resistance, there could be the potential to set new all-time-highs (ATH) around 26,500. On the downside, the Critical Support level sits in the range of 25,950-26,000.

Put OI stands significantly above call OI, reflecting traders’ confidence in holding the 26,000 support area. Fresh call writing at 26,500-26,700 suggests overhead resistance is slowly building.

Bank Nifty Outlook

Bank Nifty closed Friday at 59,777.20, gaining 0.82%. The index’s weekly candle, marked by a long lower shadow, highlights strong buying at dips.

Analysts expect targets of 60,400 and 61,000 if the index sustains above 59,200-59,100. A breakout above 60,000 could open the path for further upside.

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Broader Market & Economic Factors

With the RBI cutting the repo rate to 5.25%, liquidity conditions have improved notably. Government bond purchases of Rs. 1 lakh crore, a USD/INR swap worth $5 billion, and an upgraded GDP forecast of 7.3% for FY26 have collectively strengthened market sentiment and pushed the rupee to Rs. 89.96 per USD.

Midcaps gained 0.49%, while smallcaps fell 0.57%. Investors now await US inflation data, which may influence global rate expectations and guide near-term market direction.