Next Week’s Market Outlook: Nifty Set to Rebound with Support at 25,900

Market Overview: Recent Trends and Forecast

This week in the market: The Indian stock market continued its bullish momentum, with both the benchmark indices and Broader Index recording new all-time highs for the second consecutive week, concluding on September 27. Investors displayed a stronger inclination towards large-cap stocks compared to their small and midcap counterparts during this period. Specifically, the BSE small-cap index remained stable, while the BSE Midcap index increased by 0.7%, and the large-cap index rose by 1.5%. The overarching global bullish sentiment, primarily due to China’s recent stimulus measures and reductions in short-term interest rates, contributed significantly to this upward trend. Consequently, the BSE Sensex closed at 85,571.85, marking an increase of 1,027.54 points or 1.22%, with the Nifty 50 index showing a gain of 388.05 points or 1.50%, closing at 26,179. On September 27, both indices reached new peaks, with the BSE Sensex hitting 85,978.25 and the Nifty reaching 26,277.35.

Sector Performance

Every sectoral index ended the week in the green, indicating widespread investor confidence. Notably, the Nifty Metal index surged by 7%, the Nifty Oil & Gas index climbed by 5%, and the Nifty Auto index increased by 4%. The Nifty PSU Bank index saw a significant rise as well, up by 3.4%, reflecting robust performance across major sectors.

Institutional Investor Activities

In the realm of institutional investments, Foreign Institutional Investors (FIIs) sold equities worth Rs 3,932.80 crore during the week. In contrast, Domestic Institutional Investors (DIIs) heavily acquires equities worth Rs 15,961.71 crore. Yet, for the month to date, FIIs have been net buyers, investing Rs 22,403.72 crore, compared to DIIs who invested Rs 24,211.50 crore, illustrating a complex but optimistic investment scenario.

Small-Cap Index Performance

The BSE small-cap index demonstrated remarkable resilience, remaining flat for two consecutive weeks yet achieving new highs. Notable winners in this sector included Zee Media Corporation, Refex Industries, Sri Rayalaseema Hi-Strength, and others, with gains ranging from 20% to 59%. Conversely, several stocks faced declines, including Truecap Finance and Concord Biotech, which fell between 11% and 27%, highlighting the volatility inherent in small-cap investments.

Market Outlook for Next Week

Nagaraj Shetty, Senior Technical Research Analyst at HDFC Securities, anticipates a period of rangebound trading in the near term, followed by another upward breakout. The weekly chart indicates a robust ‘Three Advancing Soldiers’ bullish pattern, signaling a continuation of the upward trend. Consolidation is likely, with the immediate support level identified at 25,900.

Ajit Mishra from Religare Broking maintains a positive market outlook, advising investors to focus on quality stocks during any potential market pullbacks. Without significant domestic triggers, scrutiny of global market movements will be essential to forecasting direction. Support levels for the Nifty index are seen between 25,900 and 26,000, while resistance stands at 26,500.

Conclusion

As the markets exhibit bullish trends, investors should remain cautious yet optimistic. With strong performances across various sectors and continued domestic institutional support, the potential for further growth exists. However, staying informed and ready to act on market changes will be vital for maintaining portfolio health.