Sensex, Nifty trim gains but settle higher; what's ahead for investors?

Indian equity benchmarks pared some of their intraday gains on Monday but ended higher, snapping a single-session drop amid optimism over progress in US–Iran negotiations and easing crude oil prices.

The 30-share BSE Sensex pack climbed 291.17 points or 0.38 per cent to close at 77,094.07, while the NSE Nifty50 index advanced 89.80 points or 0.37 per cent to settle at 24,102.90. During the session, Sensex touched an intraday high of 77,325.56 and Nifty hit 24,168.05 level.

Broader indices also remained firm, with Nifty Midcap100 rising 0.34 per cent and Nifty Smallcap100 gaining 0.60 per cent.

Among the key contributors to the Sensex's advance were Reliance Industries Ltd (RIL), HDFC Bank Ltd, Infosys Ltd, ICICI Bank Ltd, Sun Pharmaceutical Industries Ltd, Bharti Airtel Ltd, State Bank of India (SBI) and Kotak Mahindra Bank Ltd.

Vinod Nair, Head of Research at Geojit Investments, said, "The market traded within a narrow range, albeit with a positive bias, as investors continued to assess the progress of US–Iran negotiations. Overall sentiment remained constructive, supported by outperformance in utilities, banking, and healthcare sectors. This strength was largely driven by a more selective, sector- and stock-specific investment approach."

He added, "However, concerns around the slow progress of the monsoon could lead to inflationary pressures, potentially impacting consumer sentiment and demand in agriculture-linked segments. While this may moderate near-term momentum, the broader outlook remains favourable, supported by a resilient earnings trajectory and continued policy backing, which underpin a constructive medium-term view."

Ankur Punj, MD & Business Head at Equirus Wealth, stated, "Upside was capped after a firm start and gains were muted as markets witnessed cautious optimism due to a lack of clarity over the peace deal between the US and Iran. Reports of Iran closing the Strait of Hormuz may fuel downside risk to the market due to fears of a renewed uptick in crude oil prices and its impact on the economy."

Ajit Mishra, SVP (Research) at Religare Broking, noted that the Nifty traded in a narrow range for most of the session, with selective buying in heavyweight stocks helping sustain gains, while profit booking at higher levels limited the day's advance.

"Sectoral participation remained broadly positive, with pharma and financials leading the gains, while the IT pack witnessed some respite after its recent sharp decline. Realty and auto stocks also attracted buying interest, whereas FMCG counters traded relatively subdued. Broader markets maintained their positive undertone, with both midcap and smallcap indices advancing modestly, indicating healthy participation beyond the benchmark indices," Mishra also said.

He further stated, "Sentiment improved following reports of progress in the ongoing US-Iran peace negotiations, which eased concerns over potential disruptions to global energy supplies. Brent crude prices continued to soften after a marginal rebound, providing relief from inflationary pressures. The rally was further supported by optimism surrounding index heavyweight Reliance Industries after its AGM commentary highlighted developments in its digital, AI, and new energy businesses. However, market participants remain watchful of further geopolitical developments and trends in global markets."

Nifty outlook

Osho Krishan, Chief Manager - Technical & Derivative Research at Angel One, said, "For Nifty50, the 24,050-2,4000 zone is expected to provide immediate support and absorb near-term weakness. A breach of this range could bring the stronger support band of 23,900-23,850 into focus, which is likely to serve as a sacrosanct support for the index. On the upside, 24,150-24,180 remains an important intermediate resistance zone. Beyond this, the bearish gap area between 24,250 and 24,280 is expected to act as a formidable supply zone. A decisive breakout above these resistance levels would be required to confirm renewed momentum and potentially trigger the next leg of the broader uptrend."

Krishan advised investors to continue following a buy-on-dips strategy, with corrective moves likely to attract buying interest at lower levels.