Market Wrap

Indian equity markets ended the week on a strong note, recording their best weekly performance in six months as buying interest returned at lower levels and investors increased exposure to select sectors. The Nifty 50 advanced 2.78% to close at 23,146.15, while the Sensex gained 3.11% over the week. The recovery reflected improving domestic sentiment, supported by a firmer rupee, periods of easing crude oil prices and optimism surrounding a potential India–US trade agreement.

The IT sector emerged as the primary driver of the rally, with the Nifty IT index surging 11.72% as investors returned to technology stocks following recent weakness. However, the sustainability of the recovery remains uncertain, as the rally has yet to demonstrate sufficiently broad participation across sectors. Global sentiment also remains fragile, with hotter-than-expected US inflation and concerns over debt-funded artificial intelligence investments triggering selling in US technology stocks.

Domestic inflation data added another layer of uncertainty. India's September retail inflation rose to 5.54%, while wholesale inflation accelerated to 11.39%, raising concerns about input costs, corporate margins, consumption and the future interest-rate outlook. These developments could complicate the monetary-policy environment even as equities attempt to recover.

What's Ahead

The Nifty's immediate support zone is placed at 23,000–22,950, while resistance lies at 23,290–23,350. The 50-week moving average near 23,549 remains an important higher-level hurdle. A sustained move above the immediate resistance zone could extend the recovery, whereas a break below 22,950 may invite renewed selling pressure.

Banking stocks will be in focus as investors assess the September-quarter results and management commentary from HDFC Bank and ICICI Bank. Key indicators will include net interest margins, deposit growth, credit growth and asset quality, with the results likely to influence sentiment across the banking sector. Monday's session will also coincide with the Nifty weekly expiry, brought forward because Indian equity markets will remain closed on Tuesday, 20 October, for Dussehra. The expiry could amplify intraday price swings, making support and resistance levels particularly important for short-term traders.

Market Snapshots

Institutional Activity

Sectoral Performance

Technical Outlook

Nifty 50

The NIFTY 50 advanced 148.80 points, or 0.65%, to close at 23,146.15, extending its recovery as strong buying in technology stocks supported the benchmark. Tech Mahindra led the gainers following robust Q2 FY27 results, while TCS, Infosys and HCL Technologies also recorded notable advances. The index recovered from an intraday low of 22,913.80 and closed near its session high, indicating sustained buying interest. Market breadth was marginally positive, with 26 stocks advancing against 24 declining, while the RSI moved above 50, signalling improving bullish momentum. Easing crude oil prices and renewed interest in Indian IT stocks also supported sentiment. For the next session, immediate support is placed at 22,917 and 22,776, while resistance stands at 23,375 and 23,517. A sustained move above 23,375 could extend the recovery, whereas a break below 22,917 may weaken the near-term outlook.

BankNifty

The NIFTY BANK edged up 33.50 points, or 0.06%, to close at 55,844.00, as gains in public-sector lenders offset weakness in select private banks. The index traded within a narrow range after opening higher, eventually closing marginally above its previous level. PNB, Bank of Baroda and Canara Bank were among the notable gainers, while Yes Bank, AU Small Finance Bank and IDFC First Bank faced selling pressure. Market breadth was slightly positive, with 8 constituents advancing against 6 declining, while the RSI moved closer to 50, indicating a shift towards neutral momentum. Immediate support is positioned at 55,306 and 54,973, while resistance lies at 56,382 and 56,715. A sustained move above 56,382 could strengthen the bullish setup, while a break below 55,306 would increase the risk of renewed selling pressure.

NIFTY FINANCIAL SERVICES

The NIFTY Financial Services index gained 22.90 points, or 0.09%, to close at 25,387.10, managing a marginal advance despite selling pressure across several constituents. Bajaj Finance, Max Financial Services and select banking and insurance stocks provided support, while losses in Power Finance Corporation, LIC Housing Finance, BSE and SBI Cards limited the upside. Market breadth remained weak, with 13 stocks declining against just 7 advancing, suggesting that the index's modest gain lacked broad-based participation. Immediate support is placed at 25,134 and 24,978, while resistance stands at 25,640 and 25,796. The near-term setup remains range-bound with a cautious bias, and a sustained move above 25,640 would be needed to strengthen recovery momentum. Conversely, a break below 25,134 could expose the index to further downside.

Sensex

The BSE SENSEX advanced 413.66 points, or 0.56%, to close at 74,729.27, supported by strong buying in IT stocks and select heavyweight constituents. Tech Mahindra, TCS and Infosys led the technology-driven rally, while Bharti Airtel and Mahindra & Mahindra also contributed to the gains. Market breadth remained favourable, with 17 constituents advancing against 13 declining, reflecting moderately positive participation. The index's near-term technical outlook has improved alongside the broader market recovery, although sustained buying will be necessary to overcome overhead resistance. Immediate support is placed at 73,907 and 73,398, while resistance lies at 75,552 and 76,061. Holding above 73,907 could help maintain the positive bias, while a decisive move above 75,552 would strengthen the recovery and open the way towards the next resistance zone.