Market’s Upward Climb
On Monday, the Indian stock market experienced an upward trend, as the Sensex and Nifty indices gained ground, recovering from a pause in their prior winning
streak. This resurgence was largely attributed to positive developments in the global economy. Specifically, the easing of U.S. consumer inflation figures provided a boost to investor confidence. These figures reinforced expectations that the Federal Reserve might consider rate cuts during its upcoming policy meetings in October and December of the same year. The prospect of lower interest rates in the United States typically makes emerging markets, such as India, more attractive to foreign investors. This sentiment was further supported by encouraging news concerning global trade, particularly an agreement on a preliminary trade deal between senior officials from the U.S. and China. The S&P BSE Sensex increased by over 700 points, surpassing the 84,800 mark, while the NSE Nifty 50 rose by more than 200 points, exceeding the 26,000 level.
Sectoral Performance
Across various sectors, the financial sector stood out, leading the market's positive performance. The Nifty Bank index saw an increase of 0.4%, while the Nifty PSU Bank index climbed by 1.1%. Broader markets also reflected this strength. The small-cap index experienced a gain of 0.3%, and the mid-cap index saw an increase of 0.4%. Within the 30-share Sensex, top performers included Tata Steel, Bharti Airtel, TMPV, Reliance Industries, and State Bank of India, which recorded gains ranging from 1% to nearly 2%. This across-the-board increase in market indices and sector-specific growth suggests a broad-based positive sentiment among investors. The performance of these key sectors highlights the overall health and vigor of the Indian stock market during the trading session. These specific gains showcase the market's potential for continued expansion, provided external and internal conditions remain favorable.
Expert Insights
Analysts provided insights into the market's movements and potential future trends. Hardik Matalia from Choice Broking suggested that a decisive break below 25,670 could trigger a downturn towards 25,500 and then further to 25,400. Matalia also pointed out that immediate resistance was observed at 25,950, followed by 26,000 and 26,100. He further mentioned that a sustained move above these levels would validate the continuation of the bullish trend, while failure to cross them could keep the short-term trend range-bound. Anshul Jain, Head of Research at Lakshmishree, noted that the Sensex successfully retested its previous all-time high of 84,089 and showed a strong follow-through move upwards. Matalia advised a 'buy on dips' strategy while emphasizing the importance of setting strict stop-loss levels to manage risk in this volatile environment. He mentioned that a sustained close above 58,000 would reaffirm the bullish momentum and pave the way for additional gains. If the index couldn’t maintain above this level, it might trigger short-term weakness.
Market Outlook
The Nifty index ended the week with a flat performance, gaining only 85 points after a significant upward movement. Over the weekly timeframe, the index corrected almost 311 points from its high, reflecting a volatile session and a period of consolidation after recent gains. The Nifty experienced temporary profit-taking, dropping below the 25,800 mark and closing at 25,795.15, which signaled a pause in the momentum. The Bank Nifty concluded the week on a flat note, standing at 57,699 after hitting a new all-time high during a volatile session. The index demonstrated strength by surpassing its previous peak of 57,628 but later corrected by nearly 870 points from the week's high, reflecting profit-taking at elevated levels. Jain suggested that a sustained close above 84,700 would confirm the continuation of the uptrend and open the potential for an initial move towards the 87,000 zone. Price action displayed clear bullish strength, and momentum indicators, such as RSI and short- to medium-term moving averages, consistently supported the bullish trend.
