Trade Setup for October 23: Is the Nifty poised for new highs before October ends?

The Indian equity market opened on a positive note during the Muhurat trading session, supported by upbeat global cues. Asian markets traded higher, while a strong overnight rally on Wall Street lifted investor sentiment.

Extending its winning streak for the fifth consecutive session, the Nifty closed higher in Samvat 2082's first session at 25,869, up 25 points. It marked the eighth straight Muhurat session in which the index ended in the green.

However, after hitting an intraday high of 25,934, the index gave up most of its gains but managed to close above the key 25,850 mark.

In contrast, Muhurat 2024 had witnessed muted gains following a volatile spell, with mid- and small-cap stocks underperforming amid global uncertainty. Over Samvat 2081, the Nifty delivered mid-single-digit returns, reversing a weak FY25 earnings trend that now appears to be bottoming out, suggesting a more constructive setup for Samvat 2082.

The market ended the special session higher on a low-volume day, with Nifty holding firm above 25,850. 25 Nifty stocks closed in the green, led by Cipla as the top gainer. Kotak Mahindra Bank, Asian Paints, UltraTech Cement, and HCLTech were among the top losers.

Market participants largely focused on large-cap stocks, with selective buying seen in banking, IT, and auto counters. However, some profit-booking in metal and FMCG names capped overall gains.

Broader market participation remained healthy, indicating a balanced undertone as the new trading year begins.

Looking ahead, analysts remain optimistic on Indian equities. In the near term, investors will keep an eye on earnings announcements, global interest rate trends, and crude oil prices, said Vikram Kasat of PL Capital.

Vinit Bolinjkar of Ventura Securities believes the downside from current levels is limited and expects the Nifty to improve further, targeting 27,600 in the next Samvat.

Key drivers for this potential upside, he said, include a domestic consumption-led earnings revival from Q3FY26, a possible US-India trade deal, and continued fiscal and monetary support, including rate cuts and higher government capex.

LKP Securities' Rupak De said that the Nifty remained in an uptrend even during the Muhurat session, though the trading range was narrow due to the shortened window. "Sentiment continues to favour the bulls, with the index sustaining above the critical 21-day EMA," he said. In the short term, De expects a rally towards 26,000-26,200, with support placed at 25,700.