Week Ahead.....

Benchmark indices ended at new closing high. The Nifty 50 climbed 1.71 percent for the week to 25,791, and the BSE Sensex rallied 2 percent to 84,544, while the Nifty Midcap 100 index was up 0.3 percent and Smallcap 100 index fell 0.9 percent. Bank and financial services, auto, FMCG and realty stocks saw strong buying interest, despite correction in IT, pharma and oil & gas stocks.

Markets are gradually climbing up and we expect this positive momentum to continue next week backed by strong FII inflow, healthy domestic macros, and receding concern about the US economy slowing down.

There has been a sectorial rotation among investors to largecaps, especially in consumption, staples, auto, finance, and realty. In the short term, investors are being cautious on export-oriented sectors like pharma and IT due to depreciation in the dollar.

Meanwhile, the foreign institutional investors made a strong comeback in September with Rs 14,064 crore worth of buying on Friday alone (the biggest after several months) following the big Fed pivot (50 bps rate cut). Hence, the street will keep an eye on the FII flow going ahead. The Fed rate is expected to decline steadily to 3.4 percent by the end of 2025. Bond yields in the US are steadily declining, nudging the FIIs to invest in emerging markets like India.

Technically, the Nifty 50 has broken the congestion zone of previous three weeks and gave a strong close above the rising resistance trendline with positive bias in the momentum indicators RSI (Relative Strength Index) and MACD (Moving Average Convergence Divergence). Hence, considering the positive momentum, we see the index moving beyond the psychological 26,000 mark in the coming week, with immediate support at 25,500 followed by 25,300 being a key support.

The monthly options data also indicates that the 26,000 may act as the next resistance for the Nifty 50, while the support lies at 25,500 and 25,000 being the crucial support.