Nifty Outlook: Sensex, Nifty Surge on Zero-Tariff Trade Deal Hopes and Low Retail Inflation

Mumbai, May 16, 2025: Indian stock markets witnessed a robust rally on Thursday, with the Nifty 50 index soaring past the 25,000 mark to close at 25,062.10, up 395 points or 1.60%, marking its highest close in seven months. The Sensex also climbed significantly, gaining 1,200 points or 1.47% to settle at 82,530.74. The surge coincided with the weekly derivatives expiry, driving trading volumes on the National Stock Exchange to ₹1.28 trillion, the highest since March 27.

Investor sentiment was buoyed by US President Donald Trump’s claim of a potential “zero-tariff” trade deal with India, although India’s External Affairs Minister S. Jaishankar later clarified that trade talks with the US remain ongoing and complex. This news, coupled with retail inflation dropping to a six-year low of 3.16% in April 2025, fueled optimism in the market. The decline in inflation has raised expectations of potential interest rate cuts by the Reserve Bank of India, further supporting market gains.

All sectoral indices ended in the green, with Nifty Auto and Nifty Metal leading the charge. Among Nifty 50 stocks, Hero MotoCorp topped the gainers, rising 6.17% to ₹4,318, followed by JSW Steel (up 4.82% to ₹1,037), Tata Motors (up 4.30% to ₹729), and Trent (up 3.80% to ₹5,565.50). IndusInd Bank was the only laggard, marginally down 0.17% at ₹780.

Rupak De, Senior Technical Analyst at LKP Securities, noted, “The recent consolidation breakout and move above the swing high have raised expectations of the Nifty reaching 25,690 in the short term. Immediate resistance lies at 25,360, while 24,400 is expected to act as strong support in the short to mid-term.” Experts attributed the rally to value buying in heavyweight stocks like Tata Motors, HCL Tech, Adani Ports, and Maruti, which rose 2-4%, boosting the indices.

Market Predictions for Sensex, Nifty, Bank Nifty, and Fin Nifty

• Sensex (82,531): Currently in a positive trend, with support at 81,289, 80,048, and 79,333, and resistance at 83,245, 83,960, and 85,201. Investors holding long positions should maintain a daily closing stop-loss at 80,474, with fresh short positions viable below this level.

• Nifty (25,062): Also in a positive trend, with support at 24,666, 24,269, and 24,044, and resistance at 25,287, 25,513, and 25,909. Long positions should have a stop-loss at 24,423, with short positions recommended below this level.

• Bank Nifty (55,356): Maintaining a bullish trend, with support at 54,702, 54,048, and 53,654, and resistance at 55,750, 56,144, and 56,798. Long positions should have a stop-loss at 54,282, with shorts below this level.

• Fin Nifty (26,483): In a positive trend, with support at 26,116, 25,749, and 25,531, and resistance at 26,700, 26,918, and 27,285. Long positions should have a stop-loss at 25,909, with shorts below this level.

Analysts suggest a “buy-on-dip” strategy remains effective as long as key support levels hold. The combination of low inflation, potential rate cuts, and positive trade deal sentiments continues to drive market optimism, though investors should remain cautious of global geopolitical developments and domestic policy updates.

Disclaimer:
The information provided in this article is for informational purposes only and does not constitute financial advice. Investing in the stock market involves risks, and past performance is not indicative of future results. Readers are advised to conduct their own research or consult a qualified financial advisor before making investment decisions. The author and publisher are not responsible for any financial losses incurred based on the information provided.