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Below the Quote on Weekly Note October 12 by Mr. Ajit Mishra, SVP - Research, Religare Broking Ltd

The markets ended the week marginally lower, marking a pause after a sharp decline. The week started on a downbeat note due to continued selling pressure from foreign investors, but selective strength in heavyweight stocks helped limit the losses in the later sessions. On the event front, the Reserve Bank of India's (RBI) decision to keep interest rates unchanged and mixed quarterly results from IT major TCS failed to spark any significant market reaction. By the end of the week, both benchmark indices, Nifty and Sensex, recorded modest losses, closing at 24,964.2 and 81,381.4, respectively.

Sector-wise, the market exhibited a mixed trend, with pharma, auto, and IT sectors performing well, while FMCG and metal stocks emerged as the top laggards. Notably, broader indices continued to show relative outperformance for second consecutive week, gaining over a percent each.

In the coming week, the market’s direction will largely hinge on corporate earnings, with major companies like Reliance, Infosys, HDFC Bank, Axis Bank, and HCL Tech set to release their results, among others. Additionally, investors will closely track updates on geopolitical tensions, particularly their impact on crude oil prices, and foreign fund flows. Key domestic economic data, including CPI and WPI inflation, are also scheduled for release, which could influence market sentiment.

On the global front, US markets remain resilient, continuing their upward trend despite mixed cues. However, this positivity has yet to spill over into Indian markets. Meanwhile, anticipation ofmore stimulus measures from China may continue to support the demand for metal stocks.

From a technical perspective, Nifty's bias is expected to remain negative unless it decisively reclaims the 25,300 level, representing its 20-day exponential moving average (DEMA). On the downside, immediate support is seen at 24,700, with major support at 24,400, the 100-day DEMA. However, the easing of the volatility index, India VIX, offers a positive sign. Sector-wise, IT, pharma, and metals continue to be preferred, while other sectors may experience mixed participation. Traders are advised to align their strategies accordingly, favoring hedged positions to navigate the market's volatility.

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