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Informist, Friday, May 29, 2026

By Arundathi A R

MUMBAI – Analysts expect equity indices to be rangebound with a downward bias next week as the uncertainty around the ceasefire extension in West Asia continues. They also expect the Reserve Bank of India's monetary policy decision and GDP data for Jan-Mar next week to provide more clarity on market direction.

"Going ahead, we maintain a cautious stance until the market exhibits clearer directional trends," Osho Krishan, technical and derivative analyst at Angel One, said in a note. Ruchit Jain of Motilal Oswal sees the indices moving in a range and expects positive momentum to emerge if the Nifty 50 crosses the psychologically crucial level of 24000.

"As geopolitical tensions ease and crude prices decline, India's current account and fiscal deficits are likely to stabilise," Sorbh Gupta, head of equity at Bajaj Finserv Asset Management, said. "In that environment, we believe FII (foreign institutional investment) buying could become more frequent and consistent in the daily trading data." He said FPI participation remains a key component of the Indian markets, while domestic flows have strengthened the market's resilience.

On Wednesday, foreign institutional investors were net sellers, net selling shares worth INR 10.43 billion. Domestic investors bought net shares of INR 38.21 billion. So far in May, domestic investors bought net shares worth INR 437.93 billion, according to data released by the Securities and Exchange Board of India.

Gupta of Bajaj Finserv expects crude oil prices to correct meaningfully when tensions ease and normal movement through the Strait of Hormuz resumes. "While it is difficult to assign an exact level, it is important to note that many countries have used their reserves during this period and will need to refill them," he said. "As a result, even after the conflict subsides, prices are unlikely to immediately revert to the $60–70 range, but a sharp correction from current levels is likely."

At 1651 IST, the Brent crude July futures contract was down nearly 2% at $91.98 a barrel. Crude oil prices continued their decline for the third straight session, losing almost 8% over the period.

According to the RBI's annual report for 2025–26 (Apr-Mar) released Friday, the Indian economy is expected to remain resilient in the current financial year despite a challenging external environment. Strong macroeconomic fundamentals supported India's growth prospects, but the prolonged war in West Asia poses downside risk, the RBI said.

Robust domestic demand, relatively lower dependence on exports as a growth driver, and a stable policy environment are expected to drive the Indian economy, even while the global growth outlook has moderated. India's GDP growth is expected to moderate to 6.9% in the current financial year from 7.6% in FY26, according to the RBI report.

India's headline inflation for FY27 is likely to remain aligned with the Reserve Bank of India's medium-term target of 4%, with upside risk emerging from the rising situation in West Asia, the central bank said Friday. Adequate foodgrain stocks, sufficient reservoir levels, and stable agricultural prospects are seen as positive factors for the inflation outlook.

Motilal Oswal Private Wealth retained its 'neutral' stance on Indian equities, with a relative overweight in the mid- and small-cap segments. "Although India has faced pressure from geopolitical uncertainty, elevated crude prices, slower earnings momentum, and the absence of large direct AI-linked (artificial intelligence-linked) plays, the fundamentals remain resilient, supported by healthy GDP growth, stable inflation, strong forex reserves and improving corporate balance sheets," Ashish Shanker, managing director and chief executive officer of Motilal Oswal Private Wealth, said. 

"Lower crude prices have eased concerns over India's import bill and provided support to the domestic currency," Jateen Trivedi, commodity and currency research analyst at LKP Securities, said in a note. "Technically, the rupee has immediate resistance near 94.60, while 95.30 remains an important support zone in the near term." Friday, the rupee settled at a three-week high of 95.0000 per dollar.  End

US$1 = INR 95.0000

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Saji George Titus

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