Sensex, Nifty outlook for Monday, June 1: What to expect from stock market? Key levels, strategy

Markets ended this week on a negative note, with the BSE Sensex and NSE Nifty falling 0.84% and 0.72%, respectively. On Friday, the 30-pack index closed at 74,775.74 and the 50-pack index settled at 23,547.75. Both benchmarks declined about 1.5% in the final session to end in the red.  

Looking ahead, Nifty futures on the NSE International Exchange were down 35.5 points, or 0.15%, to trade at 23,687, hinting at a muted opening with a negative bias on Monday, June 1.

Market view

Ajit Mishra, SVP of Research at Religare Broking Ltd, noted that the markets “witnessed a highly volatile week and eventually ended lower, with benchmark indices declining after three consecutive sessions of weakness."   

Initially, easing crude oil prices and hopes for a US–Iran peace agreement helped the Nifty confidently reclaim the 24,000 mark. However, Mishra pointed out that hopes of a swift geopolitical resolution faded amid renewed tensions in West Asia and persistent foreign institutional investor (FII) outflows.

Ponmudi R, CEO of Enrich Money, highlighted that markets saw a sudden sell-off of more than 1% during the closing minutes of trade. He attributed this late-stage plunge to MSCI index rebalancing-related adjustments, which triggered substantial institutional selling.   

Ponmudi emphasised that DIIs recorded cumulative net inflows of approximately Rs 25,800 crore, absorbing a substantial blow from foreign selling.  

A distinctly bifurcated performance where midcaps flirted with all-time highs while large caps lagged, Vinod Nair, Head of Research at Geojit Investments Ltd, noted.

Nair also noted that domestic sentiment took a hit from the India Meteorological Department’s below-normal monsoon forecast, stoking fears of food inflation which partially offset crude driven optimism and triggered broad-based selling into the weekend close.   

Key levels to watch

Nifty: Mishra said that Friday's sharp fall pushed bulls onto the back foot, dragging the Nifty towards the recent swing low of 23,250 and a gap area at 23,150. He said that a sustained breach below these marks could intensify corrective pressure to 22,800 level. 

Ponmudi placed immediate support slightly higher at the 23,500 mark. Both analysts agreed on the immediate upside hurdle. Mishra expects the 23,800–24,000 zone to act as stiff resistance, while Ponmudi similarly pegs immediate resistance at 23,750–23,800, with the broader 24,000–24,100 range remaining a major hurdle.  

Sensex: According to Ponmudi, the 30-share index finds its immediate support in the 74,500–74,200 zone. On the flip side, immediate resistance lies near the 75,800–76,000 zone, with 76,500–76,700 acting as a broader supply area.  

Strategy 

Mishra advised to maintain a cautious yet selective approach. Given the heightened event-driven volatility, he stressed that traders should avoid excessive leverage and maintain disciplined risk management practices, noting that a hedged and stock-specific approach remains preferable until clearer signals emerge. 

Ponmudi said that investor positioning is likely to remain selective and cautious, with confidence contingent on tangible progress on the diplomatic front and continued stability across energy and currency markets.

While Nair expects the near-term directional call for equities to hinge on the RBI monetary policy decision and India's GDP data release. He also noted that building large-cap conviction for the market's next leg higher will require confirmation through policy clarity, monsoon normalisation, and geopolitical de-escalation.