Benchmark indices extended their gains for the third consecutive session on Monday, supported by a strong late recovery. The Nifty rebounded sharply from early losses amid improving sentiment driven by optimism over a potential Iran–US ceasefire. Market breadth remained strong, with broad-based participation across sectors. The Indian rupee also appreciated for the second straight session, closing at around 93.06 against the US dollar.

At the close, the Sensex advanced by 787 points, or 1.07%, to 74,106.85, while the Nifty gained 255 points, or 1.12%, to settle at 22,968.25. Broader markets mirrored the positive momentum, with the Nifty Midcap and Small Cap indices rising by 1.52% and 1.29%, respectively. Sector-wise, Banking, Financials, Consumer Durables, and Realty stocks led the rally, each posting gains of over 2%. Metals, Auto, and FMCG sectors also ended higher with gains of around 1%. IT stocks recorded moderate gains, while the Media sector remained largely flat. Oil & Gas stocks underperformed, declining by 1.37%.

Nifty Outlook                             

The index formed a bullish candlestick pattern with a higher high and a higher low signaling continuation of the pullback from the extreme oversold territory. Index in the process moved above its previous week high 22941 for the first time in the last 8 weeks. Volatility is expected to remain elevated in the near term, driven by geopolitical tensions and firm crude oil prices, which continue to weigh on overall market sentiment.

Going ahead a follow through strength above Monday’s high 23,000 will open further upside towards 23,450 levels in the coming sessions. Failure to move above last week’s high will signal some consolidation in the range of 22,200-23,000 levels. While a breach below last week’s  panic low of 22,182 will open further downside towards the key support area of 22,000-21,800. 

Key short-term support is placed at 22,000–21,800 zone being the trendline support joining last 2-year lows and the 200 weeks EMA. For any meaningful pause in the ongoing downtrend, the index needs to form a sequence of higher highs and higher lows on the daily chart, along with a sustained close above 23,465. 

Bank Nifty Outlook

Bank Nifty formed a second consecutive bullish candlestick pattern with a higher high and a higher low signaling continuation of the pullback from the extreme oversold territory. Index in the process moved above its previous week high 52025 for the first time in last 6 weeks

Volatility is likely to remain elevated in the near term, amid geopolitical tensions and higher crude oil prices, which continue to weigh on overall market sentiment. Going ahead, a follow through strength above Monday’s high 52,704 will open further upside towards 53,500 levels. Failure to do so will lead to consolidation in the range of 50,000-52,700. 

On the downside, weakness below the psychological 50,000 levels will signal extension of the decline towards the 200 weeks EMA placed around 48,900 levels in the coming weeks. For any meaningful pause in the ongoing downtrend, the index needs to establish a sustained pattern of higher highs and higher lows in the daily chart, along with a close above recent high of 54,150.