Nifty Outlook for June 15: 24,000 back on the radar as index breaks out of range

Nifty bulls returned with force on Friday, helping the benchmark index snap a two-week losing streak as improving geopolitical sentiment triggered broad-based buying across sectors.

After moving in a narrow range over the past few sessions, the Nifty staged a decisive breakout, ending the day 461 points higher. The rally was driven by renewed optimism surrounding a potential agreement between the US and Iran, which eased concerns over global crude oil supplies and boosted risk appetite.

The index opened firmly and traded in a consolidation band through much of the session before witnessing strong buying after 1:30 pm. Momentum accelerated into the closing hour, allowing the Nifty to finish near the day's high.

Market participation remained robust. As many as 443 stocks within the Nifty 500 universe ended higher, indicating that the rally was driven by broad-based buying rather than a handful of heavyweight stocks.

Among sectoral indices, Nifty Realty emerged as the top performer, followed by Nifty Capital Markets. Nifty CPSE and Nifty IT were the only sectors that ended in the red. On the stock-specific front, Shriram Finance and IndiGo led the gainers, while ONGC and Tech Mahindra were among the laggards.

The broader market also participated in the rally. The Nifty Midcap 100 reclaimed its 20-day exponential moving average (EMA) and formed a strong bullish candle, signalling buying interest at lower levels. The Nifty Smallcap 100 outperformed both the benchmark and midcap indices and also moved back above its 20-day EMA.

What's driving sentiment?

Investor sentiment improved after reports suggested progress in negotiations between the US and Iran, raising hopes of a de-escalation in West Asia. The development eased concerns over disruptions to global energy supplies, pushing crude oil prices below the $90-per-barrel mark.

For India, lower oil prices are particularly supportive as they reduce pressure on inflation, the current account deficit and the rupee. The Indian currency also strengthened to around 94.9 against the US dollar, adding to the positive sentiment.

The sharp rebound indicates that investors are increasingly factoring in a favourable geopolitical outcome, even though a formal agreement between the two countries is yet to be announced.

Key triggers for next week

According to Siddhartha Khemka of Motilal Oswal, investors will closely monitor India's Consumer Price Index (CPI) inflation data and this week's Wholesale Price Index (WPI) print.

Global developments will also remain in focus, particularly the US Federal Reserve's policy decision, US industrial production data, crude oil price movements and foreign institutional investor (FII) activity. Any further progress in US-Iran negotiations could also influence market direction.

Technical outlook: Nifty

Analysts believe the near-term trend has turned constructive following Friday's breakout.

Nagaraj Shetti of HDFC Securities said the short-term trend has turned positive, with upside targets of 23,800 and 24,100. Immediate support is placed around 23,300.

Sudeep Shah of SBI Securities expects resistance in the 23,770-23,800 zone. A sustained move above this range could pave the way for a rally towards 23,950 and eventually 24,100. On the downside, support is seen between 23,450 and 23,470.

Nilesh Jain of Centrum Finverse said that the Nifty has reclaimed its 21-day moving average and broken out of a narrow consolidation range. He sees the 50-day moving average near 23,720 as the next key hurdle. A decisive breakout could open the path towards 24,000, while 23,500 remains an important support level.

LKP Securities' Vatsal Bhuva believes the bullish bias remains intact as long as the index holds above the 23,450-23,500 zone. A close above 23,820 would further strengthen the positive outlook and increase the chances of a move towards 24,000.

Bank Nifty remains the market leader

Bank Nifty continued to outperform the broader market and ended the week with gains of more than 4%, closing at 56,815.

The banking index played a crucial role in supporting the benchmark during the first half of the week and later emerged as the key driver of Friday's rally.

Rajesh Bhosale of Angel One expects Bank Nifty's outperformance to continue in the near term. He said that the Nifty-Bank Nifty ratio remains favourable for banking stocks, indicating that the sector could continue leading the market higher.