Can Sensex and Nifty Rebound Next Week? Key Market Triggers
Indian equity benchmarks ended last week lower after heavy selling in IT stocks and continued foreign outflows. Market direction in the coming week will hinge on global monetary cues, foreign investor behaviour, IT sector stability and whether key technical supports hold.
Indian equity benchmarks ended last week lower after heavy selling in IT stocks and continued foreign outflows. Market direction in the coming week will hinge on global monetary cues, foreign investor behaviour, IT sector stability and whether key technical supports hold.
Indian equity markets closed the previous week on a weak note as selling pressure in information technology stocks combined with cautious global sentiment to drag benchmarks lower. Investors are now evaluating whether the market is nearing a short-term bottom or facing further downside.
The outlook for the coming week rests on a narrow set of domestic and global variables that will determine risk appetite.
IT sector weakness remains the biggest drag
Technology stocks have led recent losses, reflecting investor concerns over slowing global tech spending, pricing pressure and uncertainty around how quickly artificial intelligence adoption may disrupt traditional outsourcing revenue models.
Large-cap IT companies account for a significant share of index weightage, meaning even modest declines in the sector exert disproportionate pressure on benchmarks. A stabilization in IT stocks, especially following sharp recent corrections, would be a necessary condition for any broader market rebound.
Foreign investor flows will shape momentum
Foreign institutional investors have been net sellers in recent sessions, driven by global volatility and relative valuation concerns. While domestic institutions have provided some support, sustained foreign selling has historically limited market recoveries.
Any improvement in global risk sentiment or clarity on monetary policy could prompt a pause or reversal in foreign outflows, which would immediately support equity prices.
Global monetary signals dominate sentiment
Markets remain highly sensitive to signals from major central banks, particularly on the timing and pace of potential interest rate cuts. Softer inflation trends or signs of slowing global growth could revive expectations of monetary easing, improving appetite for emerging market assets.
Conversely, stronger economic data abroad may delay policy easing and keep risk assets under pressure.
Rupee stability is a supporting factor
Currency movements continue to influence equity flows. A stable rupee reduces hedging costs for foreign investors and improves confidence in local assets. Sharp depreciation, on the other hand, tends to coincide with equity outflows and higher volatility.
Traders will closely watch currency movements alongside capital flows for early signals of sentiment shifts.
Technical levels indicate a fragile balance
From a technical standpoint, Nifty is trading near important support zones after a sustained pullback. These levels have previously attracted buying interest, but a decisive break below them could trigger further selling.
Market participants are also monitoring volatility indicators and options positioning to assess whether recent declines are being met with genuine accumulation or short-term speculative buying.
What to watch next
In the coming week, investors will track global economic data, central bank commentary, foreign fund activity and sector-specific cues, particularly from IT. While a short-term bounce is possible after recent declines, analysts say a durable rebound will require alignment across multiple factors rather than a single trigger.