Indian equity markets ended the week on a strong note, with benchmark indices gaining on the resolution of the US
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MUMBAI — Indian equity markets ended the week on a strong note, with benchmark indices gaining on the resolution of the US government shutdown, supported by strong domestic fundamentals, better-than-expected Q2 earnings, easing inflation and NDA's historic victory in Bihar, according to analysts.
Record-low October inflation reinforced expectations of an RBI rate cut, adding momentum to domestic equities.
According to Vinod Nair, Head of Research, Geojit Investments Limited, sectoral momentum was broad-based, led by gains in IT, Pharma, healthcare and Auto stocks.
“Toward the week’s close, the NDA’s Bihar election victory bolstered investor confidence, but fading expectations of a U.S. Fed rate cut triggered profit booking in IT stocks, tempering their earlier gains,” he mentioned.
The indices remained under pressure for most of the session on Friday, oscillating between losses and brief recoveries, before a strong late-afternoon rebound pushed them into the green.
Volatility picked up as markets tracked the Bihar election outcome, the day’s key trigger.
Sentiment was also weighed down by weak global cues after Wall Street fell sharply overnight, led by declines in Nvidia and other tech majors as investors dialled back hopes of near-term rate cuts amid lingering inflation worries, according to a note by Bajaj Broking Research.
At close, the Sensex ended 84 points or 0.1 per cent higher at 84,563, while the Nifty finished 31 points up at 25,910. Sectoral trends were mixed, with PSU banks leading gains at 1.17 per cent, followed by firm moves in pharma and FMCG.
Energy and infrastructure saw mild upticks. On the downside, IT declined 1.03 per cent, while auto, metal, and realty ended lower.
Among the broader market space, Nifty Small-cap 100 rose 0.38 per cent, while the Midcap 100 gained 0.08 per cent.
According to analysts, Nifty on the weekly chart has formed a strong bull candle with a higher high and a higher low signaling pullback after two weeks of corrective decline, “in line with our expectations from the key support area of 25,400-25,300”.
Going ahead, bias continues to remain positive and a follow through strength above last month high of 26,100 will open upside towards the previous all-time high of 26,277 in the coming week.
Looking ahead, market direction will hinge on key macro triggers such as India’s PMI data, US jobless claims, FOMC minutes and progress on US–India trade negotiations.