Sensex, Nifty Prediction For June 23-27: What Will Drive Indian Stock Market Next Week? Technical Outlook Here

Indian stock market witnessed a bullish trading week from June 16 to June 20, with Sensex and Nifty 50 closing above their pivotal levels 25,100 and 82,000. Key driving factors are the return of FIIs in domestic equities, RBI easing provisioning rules on infrastructure loans, coupled with a decline in major commodities like gold, bond yield and volatility index.

Going ahead, investors are likely to keep an eye on monsoon progress, geopolitical tensions, FII movement, global cues, and US economic data. Also, the 90-day truce deadline between the US and China is nearing. If Nifty can sustain above the 25,200 mark, an expectation of a rally to 25,800 is on the card.

Sensex, Nifty:

On June 20th, Sensex closed at 82,408.17, up by 1046.30 points or 1.3%, while Nifty 50 closed at 25,112.40, higher by 319.15 points or 1.3%. Overall, from June 16 to 20th, Sensex outperformed Nifty with upside of 1.5%, while the 50-scrip benchmark recorded 1.3% gains.

Puneet Singhania, director at Master Trust Group, said several reasons behind the rally, including the return of FIIs to the market despite unsettling geopolitical concerns and the RBI's decision to ease provisioning rules on infrastructure loans, which led to a significant surge in financial stocks.

Further, the analyst explained that India's central bank announced on Thursday that the lenders would need to keep 1% of the loan amount aside for under-construction infrastructure projects as a safety measure against possible losses. This is a relaxation from its earlier draft rule, which had suggested setting aside up to 5%. Additionally, the market rally also includes signs of easing tensions in the Iran-Israel conflict, as the U.S. President stated that he would take two weeks before getting directly involved in the war, raising hopes that some negotiations might take place during this period.

Apart from that, the decline in India's VIX, U.S. 10-year bond yield, and gold prices were also major reasons contributing to the bullish sentiment in the market. FIIs bought Indian equities worth ₹8,709 crore, while DIIs infused ₹12,635 crore into the cash segment, he added.

Sensex and Nifty outperformed Wall Street. Dow Jones dropped 1%, the S&P 500 index dipped 0.6%, and the Nasdaq Composite ended marginally lower during its latest week.

Investors' sentiment in US stocks was dampened over the delay in the decision of US President Donald Trump for the involvement of the US military in the Israel-Iran war. Also, the Federal Reserve has kept key interest rates unchanged for the fourth time despite solid economic growth, as they remain cautious amidst the latest uncertainties.

The Indian rupee closed the week at 86.5800 against the US dollar as of June 20, 2025. In the past month, the rupee has weakened by 1.14% against the greenback, while the local currency is down by 3.60% in a year.

Additionally, Brent crude recorded its third weekly gain despite declining by 2.3% on Friday to end at $77 per barrel. Israeli Prime Minister Benjamin Netanyahu has likely announced to intensify their strikes on strategic and government sites in Iran, as per reports.

As per Trading Economics data, despite the heightened tensions, Iran has continued crude exports, reportedly loading 2.2 million barrels per day this week, the highest level in five weeks. Meanwhile, oil prices found support from a sharper-than-expected drop in US crude inventories, with government data earlier in the week showing the largest weekly drawdown in a year. This mix of geopolitical risk and tightening supply helped maintain overall bullish sentiment in the oil market.

Stock Market Outlook For Next Week:

"With the deadline for a 90-day pause on reciprocal tariffs approaching, markets are closely tracking trade negotiations and deal-making activity expected to unfold over the next two weeks. Meanwhile, geopolitical uncertainty continues to loom, as statements from world leaders regarding possible military involvement in the Middle East keep markets on edge. Investors will also keep a close eye on upcoming U.S. GDP and PCE data, along with India's PMI figures, for cues on the strength and direction of economic recovery at home and abroad," Vinod Nair, Head of Research, Geojit Investments.

In the upcoming week, global cues will remain the dominant force, with a focus on geopolitical tensions between Iran and Israel, U.S. economic data, and commentary from Federal Reserve officials. Any signs of easing US inflation or a dovish tone from the Fed may further fuel the rally, said Ajit Mishra - SVP, Research, Religare Broking.

Meanwhile, domestically, investors will closely monitor monsoon progress, volatility related to monthly expiry, crude oil price movements, and FII activity for further cues.

Technical Outlook:

Technically, Mishra said, the Nifty has once again approached the upper band of its consolidation range. A sustained move above the 25,200 level would confirm a breakout, potentially opening the door for a rally toward the 25,600-25,800 zone. On the downside, 24,700 and 24,400 will serve as
immediate and crucial support levels.

Singhania said Nifty ended the week on a strong bullish note, gaining over 1% and reclaiming momentum after the prior week's decline. Despite midweek volatility from rising Middle East tensions and surging crude prices, the index held firm. It now trades comfortably above its 21-day and 55-day EMAs (24,828 and 24,428), indicating continued strength and buying interest.

"Strong support lies in the 24,850-24800 zone, a previously tested demand area. A breakdown below the mentioned support zone may lead to a decline toward 24,600, the recent weekly low. On the upside, immediate resistance is seen at 25,250; a decisive breakout above this level could trigger a rally toward 25,500. Positional traders can look to buy near support," Singhania added.

What Strategy Should Investors Follow?

With the Nifty approaching the upper boundary of its consolidation range, as per Mishra, the focus should remain on sector-specific leadership and identifying stocks that are showing relative strength within those sectors. A breakout above 25,200 may trigger fresh buying; however, traders should be cautious of false breakouts, especially amid heightened volatility due to the monthly expiry.

Lastly, Religare's analyst said, a stock-specific trading strategy is advisable, with preference given to sectors showing relative strength such as banking, auto, realty, and IT. Meanwhile, traders should avoid aggressive positions in FMCG, energy, and the midcap and smallcap segments until there are clear signs of renewed buying interest.