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Below the Quote on Weekly Note by Mr. Ajit Mishra, SVP - Research, Religare Broking Ltd

The markets have extended their winning streak for the third consecutive week, reaching new highs on the back of positive cues. The benchmark indices had a strong start, thanks to favorable global trends, though a mixed performance among heavyweight stocks caused slight consolidation mid-week. However, optimism returned in the final sessions, allowing both the Nifty and Sensex to gain nearly 1.5% each, closing at 25,235.90 and 82,365.77, respectively. All the major sectoral indices, except for FMCG, participated in the rally, with IT leading the way, followed by realty and pharma. The broader indices also mostly moved in line with the benchmarks, gaining over 1% each.

The new week also marks the beginning of a new month, and participants will be closely monitoring high-frequency data such as auto sales, HSBC Manufacturing PMI, and HSBC Services PMI. Nonetheless, global cues will remain a key focus, particularly as U.S. markets continue to reach new highs.

Although the market has been on a steady upward trend, momentum has been somewhat lacking, largely due to the underperformance of major banking stocks, which carry substantial weight in the benchmark. And, If we see improved participation from the banking sector, Nifty could break past the 25,500 mark and move toward a new milestone of 26,000. We thus suggest continuing with a "buy on dips" approach, with the support zone for Nifty now set at 24,750-25,000. In terms of sectors, while IT still shows promise, traders should concentrate on financials and realty for long trades next week and remain selective with other sectors.

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