Frenzied buying in Indian markets by domestic institutional investors (DIIs) and foreign portfolio investors (FPIs) has got the benchmark equity indices Nifty and Sensex near their high levels.

On Friday, Sensex gained 629 points or 1.02 per cent to close at 62,501. The Nifty index gained 178 points or 0.97 per cent to close at 18,499. FPIs stood to be net buyers worth ₹350 crore in the cash segment while the domestic institutions were net buyers to the tune of ₹18,40 crore.

FPIs on buying spree

In May so far, FPIs have been net purchasers of ₹20,606 crore worth of stocks in the cash segment.

“We expect this momentum to continue and the Nifty to touch its previous lifetime high in the coming weeks. The index is now just 380 points or 2 per cent away from its lifetime high. With the result season nearing its end, the focus will now shift to macro data, US debt negotiations and upcoming central bank policy meetings,” said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services.

World markets were mixed on Friday, amidst optimism that Congress and the US President will strike a deal to unlock a vote for lifting the US government’s debt ceiling and avert a potentially disastrous default although growing concerns over a slowing global economy restrained investors.

Weather forecast

The Indian Meteorological Department has retained its forecast of a normal monsoon even as it expects ‘below normal’ rainfall in June. The southwest monsoon seasonal rainfall over the country as a whole is likely to be 96 percent of the long-period average with a model error of +/-4 per cent, officials from the IMD said in its second forecast for the year on Friday. The 2023 June rainfall averaged over the country as a whole is most likely to be below 92 per cent of LPA, according to the IMD.

Amol Athawale, Technical Analyst (VP), Kotak Securities, is of the view that short-term market outlook was robust, with key Nifty levels at 18,350 and Sensex at 62,000 acting as trend deciders. 

“If the index moves above these levels, it could rise towards 18,600 /62,800 and potentially continue further to 18680/63000. Conversely, if the index falls below 18,350/62,000, traders may prefer to exit their long positions. For Bank Nifty traders, the 20-day SMA and 4,3600 are important support levels. If the index remains above this zone, it could rally towards 44,500-44,700. However, a fall below 43,600 may accelerate selling pressure, leading to a potential retest of levels around 43,400-43,000,” Athawale said.