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Below the Quote on Weekly Market Analysis by Mr. Ajit Mishra – SVP, Research, Religare Broking Ltd

Markets experienced range-bound consolidation last week, showing significant volatility but ultimately ending slightly higher, marking a pause in the four-week losing streak. The benchmark indices began the week on a positive note and tried to build on those gains, but global weakness and disappointing earnings capped the upside. The Diwali special one-hour trading session on Friday provided a boost, helping both the Nifty and Sensex finish in the green, closing at 24,304.30 and 79,724.12, respectively.

Despite the choppy conditions, certain sectors, particularly metals, realty, and banking, displayed strength, while IT underperformed with a nearly 4% drop after weeks of robust performance. Broader indices, however, outpaced the benchmarks, with the small-cap index gaining over 5%, providing some relief to market participants.

Looking forward, markets are expected to remain sensitive to foreign fund outflows and a subdued earnings season. In the upcoming week, investor attention will also be on developments in U.S. markets, especially the upcoming U.S. elections on November 5 and the Federal Reserve’s policy meeting on November 8. On the domestic front, earnings reports from key companies, including Dr. Reddy’s, Titan, Tata Steel, M&M, Tata Motors, and Asian Paints, will be in focus. Additionally, the release of key economic indicators, such as the HSBC Manufacturing PMI, Composite PMI, and Services PMI, will provide insight into the country’s economic momentum.

The Nifty continues to consolidate within the 24,000-24,500 range, and a breakout on either side is expected to determine the next direction. An upward breakout past 24,500 could see the index target the 24,800 mark, while a break below the lower boundary may undermine recovery efforts, potentially taking the index down to 23,500, aligning with the 200-day exponential moving average (DEMA). Given the mixed sectoral trends, traders are advised to adopt a stock-specific approach, with a balanced strategy to navigate the current market environment.

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