Nifty soars 2.8% this week: What lies ahead for Dalal Street? - Experts decode 5 triggers, key levels for next week
Stock Market Outlook: Indian equities staged a strong comeback this week, with the Nifty 50 rising 2.77% and the Sensex surging 3.11%, as renewed buying in information technology (IT) stocks, easing global bond-yield pressures and resilient domestic institutional inflows lifted investor sentiment.
Both benchmarks also extended their gains for a second consecutive session on Friday, strengthening hopes of a recovery after the recent market correction.
On Friday, the Sensex climbed 413.66 points, or 0.56%, to close at 74,729.27 on Friday, while the Nifty advanced 148.80 points, or 0.65%, to settle at 23,146.15. For the week, the Sensex gained 2,256.94 points, while the Nifty added 625.7 points.
However, the rally faces several tests, including whether earnings growth broadens beyond IT, foreign investor selling eases further and the Nifty breaks through immediate resistance. Market experts believe investors should remain selective as global macroeconomic uncertainty and domestic inflation concerns persist.
The September-quarter earnings season will remain a major driver of market sentiment. Investors will assess whether companies can deliver stronger revenue growth and margins across banking, consumption and industrials, rather than relying primarily on IT stocks to sustain the recovery.
Vinod Nair, Head of Research at Geojit Investments Limited, said, “The sustainability of the recovery will hinge on earnings growth broadening beyond IT, with revenue and margin delivery across financials, consumption and industrials under close scrutiny.”
Foreign institutional investor (FII) flows remain a key variable for the market. While foreign portfolio outflows have moderated, domestic institutional investors (DIIs) continue to provide support through sustained buying.
Ravi Singh, Chief Research Officer at Master Capital Services Ltd, said weekly foreign portfolio outflows narrowed to ₹8,991 crore, while domestic institutional investors purchased approximately ₹7,813 crore worth of shares. Any further moderation in foreign selling could help stabilise the indices.
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