Indian equity indices experienced a significant rally last week, with both the Sensex and Nifty reaching new all-time highs of 85,978.25 and 26,277.35, respectively. Market experts are optimistic about the outlook for next week.
The direction of the market is expected to be influenced by fluctuations in commodity prices, the US dollar index, and key macroeconomic data from the US. Geopolitical developments are also likely to play a crucial role on the global stage.
Domestically, upcoming data on manufacturing and services PMI, monthly auto sales, and quarterly corporate earnings could drive stock-specific movements in the near term.
Last week, the key benchmark indices, Nifty and Sensex, maintained their upward momentum for the third consecutive week, achieving fresh record highs.
This rally was fuelled by growing optimism surrounding potential reductions in borrowing costs by major central banks, including the Reserve Bank of India (RBI), following a 50 basis point cut by the US Federal Reserve in the week ending 20 September.
On Friday, the Sensex closed at 85,571, down 264 points, or 0.31 per cent, while the Nifty settled at 26,178, down 37 points, or 0.14 per cent.
Among sectoral indices, metals emerged as the top performer, followed closely by the auto sector.
The People’s Bank of China (PBoC) reduced the cash reserves that banks must hold by 50 basis points in an effort to support its faltering economic growth.
In terms of domestic sentiment, robust foreign inflows have bolstered the market. In September alone, foreign institutional investors (FIIs) invested ₹25,215.25 crore in the cash segment, while domestic institutional investors (DIIs) invested ₹25,214.25 crore.
Vishnu Kant Upadhyay, Assistant Vice President of Research and Advisory at Master Capital Services, noted: “Nifty has delivered a strong weekly closing for the third consecutive month, now trading above 26,000. Market sentiment remains positive, with immediate resistance at 26,500. A breakout above this level could propel the index towards 26,650.”
“On the downside, key support is at 25,900; a breach could trigger selling pressure towards 25,600. Given the prevailing positive sentiment, we recommend a ‘buy on dip’ strategy for traders looking to capitalise on any short-term corrections,” Upadhyay added.
Santosh Meena, Head of Research at Swastika Investmart, commented: “Last week, Bank Nifty witnessed some profit booking around the 54,500 level. Immediate support levels are at 53,700, 53,300, and 53,000, with bullish momentum persisting as long as it remains above the 53,000 mark. Resistance levels are noted at 54,500, 55,000, and 55,500.”
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