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

The markets continued to consolidate for another week, losing over half a percent, signaling the continuation of a corrective phase. The week began cautiously due to concerns ahead of the U.S. elections, followed by a brief mid-week recovery after the results. However, the gains could not hold, leading the benchmark indices, Nifty and Sensex, to close lower at 24,148.20 and 79,486.32, respectively.

During this period, most sectors saw declines, with realty, energy, and FMCG leading the losses. On the other hand, a strong rebound in the IT sector helped cushion the broader market’s fall. Meanwhile, the performance was mixed in the broader indices as small-cap stocks dropped nearly 2%, while mid-caps were relatively stable.

With a key global event behind us, the market’s focus will now return to domestic factors, such as foreign fund flows and the final phase of the earnings season. Indian markets have shown a pattern of reacting more to global risks while not fully participating in positive global momentum. For instance, despite U.S. markets rallying over 4.5% after the election results, Indian indices failed to mirror that uptrend. Additionally, upcoming high-frequency economic data like IIP, CPI, and WPI inflation figures will be closely watched by market participants.

The Nifty remains in a consolidation range between 24,000-24,500, with mixed signals indicating that this phase may continue. A clear breakout above the 24,500 level could drive the index toward 24,800, whereas a breakdown might increase pressure, potentially pushing it down to the 200-day exponential moving average (DEMA) near 23,500.

Among the sectors, the IT sector’s resilience offers a glimmer of hope for recovery. However, the continued consolidation in the banking sector between the 50,500-52,500 levels keeps market participants uncertain about the next move. Given this environment, traders are advised to align their positions with the current range, focus on selective stock picking, and adopt a hedged approach to mitigate risks

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