The Indian stock market, led by the Nifty 50 index, has remained in a consolidation phase for the past two weeks, but sentiment has turned positive with many analysts expecting an upside breakout above 25000 in the upcoming sessions. Backed by strong domestic GDP data, renewed foreign institutional investor (FII) interest, and a steady macroeconomic environment, the index seems poised for new highs — provided key levels are respected.

Steady Momentum Points Towards 25500 and Beyond

Anand James, Chief Market Strategist at Geojit Financial Services, stated that a direct rise above 25077 would likely pave the way towards intermediate targets of 25235 to 25460. He added, “While an upside move aiming for 26200 remains on the cards, we feel that such a move would require more momentum than what is present at the moment. A dip towards 24500 could reignite such hopes.”

Ajit Mishra, Senior Vice President at Religare Broking, emphasised the importance of the 20-day exponential moving average (20-DEMA) currently at around 24600, which Nifty continues to hold above. “A strong close above 25200 could rekindle bullish momentum and open the path toward the 25600+ zone,” said Mishra. However, he cautioned that a decisive breach below 24600 could trigger profit-booking, possibly pulling the index down towards 24200.

GDP Data Supportive of Upside

India’s real Gross Domestic Product (GDP) grew by 6.5% year-on-year in FY25, slightly above expectations, mainly driven by strong Private Final Consumption Expenditure (PFCE) which grew 7.2% compared to 5.6% in FY24. This performance signals resilient consumer sentiment and increased government capital expenditure.

The continued growth in Gross Fixed Capital Formation (GFCF) also supports the economy, despite earlier underperformance in the first nine months of FY25 (9MFY25) and muted private capex intentions. According to SBI Capital Markets, this broader-based economic expansion bodes well for the market outlook.

FII Buying a Key Catalyst

Another major factor supporting Nifty’s bullish prospects is the return of foreign investors. FIIs, who were net sellers in January, February, and March this year, reversed their stance in April and May.

VK Vijayakumar, Chief Investment Strategist at Geojit Investments, explained, “The FII trend changed from heavy selling in January — when the dollar index peaked at 111 — to net buying in April and May. In May alone, FIIs bought Rs 18082 crores through the exchanges.”

Vijayakumar attributes this renewed interest to a combination of declining US dollar strength, slower global growth in the US and China, and positive domestic macroeconomic factors such as high GDP growth, easing inflation, and a potential rate cut by the RBI in the near future.

Global Cues Still a Risk Factor

Despite the domestic tailwinds, some caution is warranted. Global market trends, especially from the United States, could impact short-term movements. US futures are currently trending lower, which might dent sentiment at the start of the week.

Key Nifty Levels to Watch This Week

• Immediate Resistance: 25077

• Intermediate Resistance: 25235 to 25460

• Major Target Zone: 26200 if momentum builds

• Support Zone: 24600 (20-DEMA), with deeper support near 24500

• Breakdown Risk Level: 24200 if 24600 fails to hold

The overall outlook remains positive for Nifty as long as the index stays above its key moving averages and continues to attract FII inflows. Domestic macroeconomic stability and earnings optimism are expected to provide the tailwinds required for a sustained rally, even as traders remain vigilant of global uncertainties

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