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Below the Quote on Weekly Market Outlook  for the coming week, and technical views from Mr. Ajit Mishra, SVP – Research, Religare Broking

Market Summary

Markets staged a strong rally during the week, supported by favourable domestic and global cues. Easing crude oil prices, the outcome of the US midterm elections, sustained foreign institutional investor (FII) buying and a sharp appreciation in the rupee boosted investor sentiment. Strong Q2 FY27 earnings from Reliance Industries and Jio Platforms further strengthened the positive undertone. The rally gathered momentum through the week, with the Sensex and Nifty advancing for seven consecutive trading sessions.

Consequently, the benchmark indices registered impressive gains, with the Sensex surging around 8.82% to settle at 81,028.02 and the Nifty advancing approximately 8.58% to close at 25,030.35. Broader markets also participated in the rally, with mid-cap and small-cap indices gaining between 2.8% and 5.79%.

Key Market Drivers

Easing crude oil prices and improving global sentiment following the US midterm election outcome supported risk appetite. The Democrats secured control of both chambers of Congress, adding to the positive global market undertone. Sustained FII buying, coupled with a sharp appreciation in the rupee to a six-month high, further reinforced confidence in domestic equities. Strong Q2 FY27 earnings from Reliance Industries and Jio Platforms provided additional support, while investors continued to assess corporate performance and management commentary across sectors.

On the domestic economic front, India's HSBC Services PMI rose to 55.8 in October from 55.2 in September, marking its fastest expansion in four months. The Composite PMI Output Index also increased to 56.2 from 55.9, indicating the fastest expansion in private-sector activity since June. Stronger domestic demand supported services activity, while easing input cost inflation provided some comfort. However, slower export order growth, moderating employment and weaker business confidence remain areas to monitor.

Key Events to Watch

The Q2 FY27 earnings season will remain active, with Divi's Laboratories, Tata Steel, Tata Power, HAL, Vodafone Idea, Grasim Industries, ABB India and Tata Motors Passenger Vehicles are scheduled to announce their results during the week along with several others.

On the macroeconomic front, investors will track India's October CPI inflation data, bank credit and deposit growth and RBI foreign exchange reserves data. Globally, US inflation, China's trade and inflation figures, crude oil prices and geopolitical developments involving the US and Iran will remain key triggers.

Markets will also observe the special Muhurat trading session on 8 November, from 2:20 pm to 3:30 pm, marking the beginning of Samvat 2083. Regular trading will remain closed on 10 November on account of Diwali-Balipratipada.

Technical Outlook

Nifty: The sharp weekly rally has significantly improved the near-term technical setup, with the index reclaiming the 25,000 mark. Going ahead, the sustainability of this up move will be crucial in determining whether the recent recovery can develop into a broader and more durable uptrend. We expect the 24,200–24,500 zone to act as an important support base, while the index could extend its up move towards 25,200–25,600 in the coming sessions.

Bank Nifty: The banking index also regained momentum, advancing around 8% during the week, supported by a notable surge in heavyweight banking stocks. Its performance will remain important for confirming the strength of the broader market rally. We expect the index to move towards the 60,000 mark, followed by a gradual advance towards its record-high zone of 61,500. On the downside, the 57,000–58,300 zone is likely to provide support during any profit-booking or consolidation.

Broader Indices: Mid-cap and small-cap indices also participated in the weekly rally, although their gains remained relatively lower than those of the frontline benchmarks. This reflects an improvement in market breadth, but sustained participation across the broader universe will be essential to validate the strength of the recovery. Investors should remain selective, focusing on stocks demonstrating relative strength, improving price structures and earnings visibility rather than chasing sharp short-term rebounds.

Strategy Ahead

The near-term outlook has turned constructive following the sharp weekly recovery, supported by easing crude oil prices, improving global sentiment, renewed FII buying and encouraging corporate earnings. However, the pace of the recent advance warrants caution against chasing prices at elevated levels. The sustainability of the rally will depend on continued foreign inflows, earnings resilience and stability in global cues. Participants should remain selective, with a preference for BFSI, pharma, realty and services, while identifying stock-specific opportunities in other sectors. Fresh allocations should be staggered, and traders should maintain disciplined risk management, particularly for overnight positions, amid the possibility of intermittent volatility and profit-booking.

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