Nifty50 Market Trend Report: May 2025 Overview and June 2025 Outlook

Summary

The Nifty 50 index, a benchmark for the Indian equity market, concluded May 2025 with a 1.7% gain, closing at 24,833.60 on May 30, 2025. Despite periods of high volatility, the index maintained an upward trajectory, driven by positive global cues, domestic economic developments, and sector-specific performances. This report analyzes recent market trends, key factors influencing these movements, and provides insights into potential trends for June 2025 based on historical data, technical analysis, and prevailing economic conditions.

NIFTY50 gained 1.7% in May, whats in store for June? Image source: Shutterstock.

Market Trend Overview: May 2025

The Nifty50 exhibited resilience in May 2025, gaining 586 points over the month, with 11 out of the last 17 May periods ending in positive territory. The index oscillated between key support levels at 24,650–24,700 and resistance zones around 25,000–25,200. Key highlights include:

• Closing Performance: The Nifty 50 ended May at 24,833.60, up 0.33% on the final trading day (May 30), with the Sensex closing at 81,633.

  
  

• Volatility and Consolidation: The month saw high volatility, with the index trading in a range-bound manner, particularly in the latter half, as it approached the psychological resistance of 25,000.

  
  

• Sectoral Performance: Gains were led by sectors such as Realty, Metal, Healthcare, and PSU banks, with notable performers including Bharat Electronics (BEL), Adani Ports, and Tata Steel. Conversely, stocks like UltraTech Cement, Asian Paints, and Power Grid lagged.

Weekly Trends:

• May 15: The Nifty 50 traded around 24,752.50, showing an inside bar candlestick pattern, indicating indecision with support at 24,378 and resistance at 25,000.

  
  

• May 23: The index surged, driven by positive global cues such as falling crude oil prices and strong corporate earnings from companies like ITC.

  
  

• May 26–27: The Nifty 50 closed above 25,000 briefly, supported by global optimism following the U.S. decision to delay 50% tariffs on the EU until July 9, 2025. However, it faced resistance at 25,150 and ended the week with a 0.6% gain at 25,001.15.

  
  

• May 29–30: Markets rebounded after a U.S. court blocked reciprocal tariffs, with the Nifty 50 closing above 24,800, though it faced selling pressure near 25,150.

  
  

Key Factors Influencing Market Trends in May 2025

Several domestic and global factors shaped the Nifty 50’s performance in May 2025:

1.Global Economic Developments:

• U.S. Tariff Delay: U.S. President Donald Trump’s decision to postpone 50% tariffs on the European Union until July 9, 2025, eased trade war concerns, boosting global market sentiment. This led to a rally in U.S. indices (S&P 500 up 2.05% on May 27) and supported Indian markets.

  
  

• Crude Oil Prices: A decline in crude oil prices, driven by expectations of increased OPEC+ output, reduced input costs for Indian industries, supporting market sentiment. Brent crude rose modestly to $65.15 per barrel, and WTI to $61.87, reflecting stabilized demand expectations.

  
  

• Mixed Asian Markets: Asian markets showed mixed performance, with Japan’s indices gaining and Hong Kong’s Hang Seng declining, creating a cautious but optimistic global backdrop.

2.Domestic Economic Indicators:

• RBI Dividend: The Reserve Bank of India’s ₹2.69 lakh crore dividend to the government for FY25 bolstered fiscal confidence, enhancing market morale.

  
  

• Foreign and Domestic Institutional Investments: On May 30, Foreign Institutional Investors (FIIs) invested ₹884 crore, and Domestic Institutional Investors (DIIs) added ₹4,286 crore, supporting the Nifty’s upward movement.

  
  

• India’s Economic Position: India’s emergence as the fourth-largest economy globally boosted investor confidence, contributing to the bullish sentiment.

3.Technical Factors:

• The Nifty 50 moved above the 61.8% Fibonacci retracement level of its fall from September 2024 to April 2025, signaling strength in the rally.

  
  

• The index traded above key moving averages (20, 50, 100, and 200-day), reinforcing the bullish trend.

  
  

• Resistance at 25,000–25,200 and support at 24,650–24,700 defined the trading range, with consolidation indicating a potential breakout.

4.Sectoral and Corporate Performance:

• Top Gainers: Stocks like BEL, Adani Ports, and Tata Steel drove gains, supported by strong sectoral performance in metals and PSU banks.

  
  

• Laggards: UltraTech Cement, Asian Paints, and Power Grid underperformed, reflecting sector-specific challenges.

  
  

• Corporate Earnings: ITC’s 247% profit surge in the March quarter, driven by the demerger of its hotels business, significantly contributed to the Sensex and Nifty gains.

Outlook for June 2025

The Nifty 50’s performance in June 2025 is anticipated to be influenced by historical trends, technical indicators, and macroeconomic developments. Below is a detailed outlook:

1.Historical Performance:

Historically, the Nifty 50 has delivered positive returns in June 60% of the time but often shows an inverse relationship with May’s performance. Given May’s 1.7% gain, a cautious approach is warranted due to the “June Swoon” adage, which suggests potential underperformance following a strong start to the year.

However, sustained momentum from April and May 2025 rallies suggests a potential “June Boom” if the index breaks above the 25,000–25,200 resistance zone.

2.Technical Analysis:

• Support and Resistance: The Nifty 50 is expected to find support at 24,500–24,650, with resistance at 25,000–25,100. A sustained move above 25,200 could propel the index toward its all-time high, approximately 5% higher (around 26,100). A break below 24,500 could trigger a decline to 24,300–24,400.

  
  

• Forecasts: Predictions for June range from a 0.7% drop to a 4.7% rise, with the index potentially trading between 24,500 and 25,600.

  
  

• Candlestick Patterns: The formation of a doji candle with a long lower shadow on the weekly chart suggests consolidation with buying interest at lower levels, indicating potential for an upward breakout.

3.Key Factors to Watch:

• Global Trade Developments: The delayed U.S.-EU tariffs (until July 9, 2025) provide a temporary reprieve, but any escalation in trade tensions could dampen sentiment.

  
  

• Monetary Policy: The U.S. Federal Reserve’s stance, as indicated by Chairman Jerome Powell, will influence global liquidity and investor confidence.

  
  

• Domestic Events: The Indian government’s fiscal policies, supported by the RBI dividend, and continued institutional investments will be critical.

  
  

• Sectoral Trends: PSU banks, metals, and realty are likely to remain strong, while IT and FMCG may face pressure, as seen in late May.

4.Potential Scenarios:

• Bullish Case: If the Nifty 50 sustains above 24,700 and breaks through 25,200, it could target 25,600–26,100, driven by strong institutional buying and positive global cues.

  
  

• Bearish Case: A failure to hold 24,650 could lead to a correction toward 24,300–24,400, particularly if global trade tensions resurface or domestic selling pressure increases.

  
  

• Base Case: The index is likely to consolidate between 24,500 and 25,600, with a bias toward cautious optimism unless significant catalysts emerge.

  
  

5.Recommendations for Investors

• Traders: Adopt a range-bound strategy, buying near support levels (24,650–24,700) and selling near resistance (25,000–25,100). Monitor breakout signals above 25,200 or breakdowns below 24,500 for directional trades.

  
  

• Long-Term Investors: Focus on fundamentally strong stocks in PSU banks, metals, and realty. Accumulate on dips near support levels, given the index’s bullish trend above key moving averages.

  
  

• Risk Management: Maintain strict stop-losses below 24,500 to mitigate downside risks, especially given potential volatility from global trade developments.

Conclusion

The Nifty 50’s 1.7% gain in May 2025 reflects a robust performance amid global and domestic challenges. Positive cues from delayed U.S. tariffs, strong institutional inflows, and India’s economic growth supported the rally, though resistance at 25,000–25,200 capped gains. For June 2025, the index is poised for consolidation with a potential breakout toward all-time highs if it sustains above 25,200. Investors should remain vigilant, balancing optimism with caution, as global trade dynamics and domestic economic indicators will shape the market’s trajectory.