Weekly Note by Mr. Ajit Mishra, SVP - Research, Religare Broking Ltd
Below the Quote on Weekly Note by Mr. Ajit Mishra, SVP - Research, Religare Broking Ltd
Markets Edge Higher After Three Weeks of Consolidation, Nifty Surges Past 25,000
Markets advanced notably this week, breaking a three-week consolidation phase and posting gains of over 4%, buoyed by favorable cues. The benchmark indices started the week on a strong note, briefly paused mid-week, but regained momentum in the latter half. As a result, the Nifty and Sensex closed at 25,019.80 and 82,330.59 respectively.
Key Market Drivers
The market’s upward momentum was driven primarily by the announcement of a ceasefire between India and Pakistan over the weekend, signaling a reduction in geopolitical tensions. Investor sentiment received a further boost from optimistic developments surrounding the US-China trade negotiations, which eased fears of a global economic slowdown due to prolonged tariff disputes.
Additionally, the release of softer retail and wholesale inflation data raised hopes of an interest rate cut by the Reserve Bank of India in its upcoming policy meeting. Consistent buying by Foreign Institutional Investors (FIIs) further amplified the positive undertone in the market.
Sectoral Snapshot
The rally witnessed broad-based participation, with all major sectors contributing to the gains. Realty, metal, and energy stocks emerged as the top performers. Moreover, thematic plays such as defense, railways, and select PSUs across sectors attracted notable investor interest.
Broader market indices outperformed their benchmark counterparts, with midcap and smallcap indices recording robust gains in the range of 7%-9%, further strengthening market sentiment.
Key Events to Watch
With no major global or domestic events scheduled, market focus is expected to shift towards domestic earnings and high-frequency economic data for directional cues. Updates on global trade deals and their impact on global markets will also be closely tracked.
Participants will continue to monitor foreign capital flows, which have played a significant role in sustaining the current rally.
On the corporate earnings front, several prominent companies, including ONGC, ITC, Hindalco, JSW Steel, and Power Grid, are set to announce their quarterly results, which could influence near-term market trends.
Technical Outlook
Having broken out of a three-week consolidation, the Nifty is expected to sustain its upward momentum. The index is now targeting levels of 25,200–25,600. On the downside, the earlier resistance at 24,800 is likely to act as immediate support, with a stronger support base at 24,400.
Within the index constituents, the banking sector has entered a consolidation phase after a strong run. However, it continues to hold firmly above its short-term 20-day exponential moving average (20-DEMA), indicating a potential resumption of the uptrend. The index could see an upside move towards 56,000 and eventually 57,500, with 54,350 and 53,600 acting as key support levels on any dip.
Strategy Ahead
We maintain a bullish outlook on the market and advise investors to adopt a “buy on dips” approach. With all major sectors participating in the rally on a rotational basis, stock selection based on a favorable risk-reward profile remains critical.
In particular, thematic plays like defense, railways which have shown exceptional performance in recent weeks, may continue to offer opportunities. However, traders should maintain a disciplined approach, including clear exit strategies while pursuing momentum trades, and avoid taking contrarian positions without strong supporting signals.
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