Diwali Week Sees Market Rebound; Oil, US Politics in Focus
The Indian stock market delivered a strong comeback just before Diwali, recovering from a period of prolonged weakness. During the trading days between October 26 and October 30, the Sensex gained 1,335.70 points, or 1.83 per cent, to end at 74,459.53. The Nifty 50 rose 453.10 points, or 2.00 per cent, to finish at 23,053.10.
Fresh buying in pharma, IT and some other sectors boosted investor confidence during the week. As a result, the market closed the week on a positive footing.
Looking ahead, market experts believe the first week of November will be guided by a mix of global and domestic developments. The US mid-term elections, the US-Iran standoff, crude oil price movements and corporate earnings are all expected to influence investor decisions. While the trend remains positive, volatility is likely to persist.
The Nifty opened the week on a soft note and dropped to a weekly low of 22,387.35 on the first trading day. Strong buying interest surfaced at this level, which helped the index recover and close at 23,053.10. Overall, the index added around 453 points, or 2 per cent, during the week.
From a technical standpoint, the Nifty has taken strong support near its 200-week exponential moving average and a long-term uptrend line. This has strengthened the near-term picture compared with the recent past.
In sectoral terms, Nifty Pharma was the standout winner, gaining about 7.09 per cent. The Media index rose 4.34 per cent, followed by the Realty index with a 3.77 per cent increase.
Metal, auto, FMCG and PSU bank stocks also advanced by 2 to 3 per cent. Gains in banking and financial services were comparatively restrained.
Analysts point out that second-quarter results supported stock-level buying across multiple sectors.
According to technical analysts, 23,200 is the most crucial near-term resistance for the Nifty. If the index decisively crosses this mark, the next target could be in the range of 23,700 to 24,000.
On the other side, 22,850 is the first important support. The 22,600 to 22,400 zone is also considered vital, as it overlaps with the 200-week EMA and the long-term trendline.
Experts say crude oil is the most pressing worry at present. Brent crude recently climbed above $117 per barrel. Sustained high oil prices could intensify pressure on inflation and foreign investment flows.
Additionally, US-Iran tensions and the US mid-term elections are seen as key factors that will determine the direction of global markets.
Market watchers conclude that while the technical condition has improved, the Nifty must sustain levels above 23,200 to signal a strong bullish phase. For now, the preferred approach is buy on dips, focusing on selective accumulation during corrections.