Broader markets underperform; Tata Elxsi, KPIT Technologies, Suzlon Energy lead midcap gainers

Market Mastery

Webinar by Vishal Malkan

Find the weak links

in your portfolio by Vishal Malkan

The broader markets underperformed the benchmark indices during the week ended October 16, with the Nifty Midcap 100 index rising 0.6 percent, while the Nifty Smallcap 100 index ended marginally lower, declining around 0.1 percent.

For the week, the BSE Sensex rose 2256.94 points, or 3.11%, to 74,729.27, while the Nifty50 rose 625.7 points, or 2.77%, to 23,146.15.

The Nifty Midcap 100 index rose 0.6 percent during the week, led by gains in Tata Elxsi, KPIT Technologies, Suzlon Energy, Waaree Energies, UPL, Havells India, Hero MotoCorp, Hindustan Petroleum Corporation and Prestige Estates Projects. On the other hand, Yes Bank, ICICI Prudential Asset Management Company, Fortis Healthcare, Exide Industries, GE Vernova T&D India, LIC Housing Finance and Hitachi Energy India emerged among the key laggards.

The Nifty Smallcap 100 index ended the week largely unchanged, with gains in select stocks offset by losses in others. HBL Engineering, Zensar Technologies, Syngene International, Aditya Birla Real Estate, Aarti Industries, Tata Chemicals, Bandhan Bank, Anand Rathi Wealth, Brainbees Solutions, KFin Technologies, Cohance Lifesciences, BLS International Services, Firstsource Solutions and Crompton Greaves Consumer Electricals advanced between 5 percent and 16 percent. In contrast, Anant Raj, RBL Bank, Physicswallah, Sai Life Sciences, Reliance Power and Neuland Laboratories declined between 5 percent and 10 percent.

Among sectoral indices, the Nifty IT index surged 11.7 percent, posting its biggest weekly gain in 18 years, driven by better-than-expected Q2 earnings. The Nifty Media index jumped more than 6 percent, while the Nifty Auto index gained 3 percent. The Nifty Realty and Nifty Defence indices advanced 2.7 percent and 2.2 percent, respectively. On the other hand, the Nifty Healthcare index declined 1 percent, while the Nifty Pharma and Nifty FMCG indices fell 0.7 percent and 0.55 percent, respectively.

"Over the last week, the benchmark indices staged a sharp recovery. The Nifty ended 2.8 percent higher, while the Sensex gained 2250 points. Among sectoral indices, IT was the top performer, rallying over 10 percent. In contrast, despite the strong market momentum, the Healthcare and FMCG indices declined by more than 1 percent," said Amol Athawale, VP Technical Research, Kotak Neo.

"During the week, the market found support near the 22,300/71700 level and rebounded strongly. Technically, the weekly chart has formed a long bullish candle, while the daily and intraday charts continue to indicate an uptrend continuation pattern, which is largely positive. In addition, the market not only surpassed the 20-day SMA (Simple Moving Average) resistance zone but also closed above it, further strengthening the positive outlook."

"We believe the short-term market structure remains positive; however, a buy-on-dips and sell-on-rallies strategy would be ideal for traders. On the downside, 23,000/70800 and the 20-day SMA near 22,800/70200 are likely to act as key support levels, while 23,300/71700 and 23,500/72300 could serve as crucial resistance zones for the bulls. On the flip side, a move below 22,800/70200 could alter market sentiment. In such a scenario, traders may consider exiting their trading long positions," he said.

"For Bank Nifty, 55,000 and the 20-day SMA or 55,300 are expected to act as key support levels. As long as the index trades above these levels, the positive sentiment is likely to continue. On the upside, the rally could extend towards 56,300, 56,500, and 56,800," Athawale added.

Foreign institutional investors (FIIs) extended their selling streak to the eighth consecutive week, offloading equities worth Rs 8,990.50 crore. Meanwhile, domestic institutional investors (DIIs) continued to provide support to the market, purchasing equities worth Rs 7,812.81 crore during the week.

The market capitalisation of BSE-listed companies increased by more than Rs 7 lakh crore during the week.

Where is market headed?

Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services

Nifty 50 is expected to consolidate with a gradual recovery, although intermittent volatility may persist in broader markets. Brent crude remained around USD 105/bbl, keeping geopolitical and inflation risks in focus.

Key monitorables include crude prices, Foreign Institutional Investor flows, the rupee and quarterly earnings.

Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities

On Friday, Nifty extended its upward momentum for the second consecutive session, closing 0.65% higher. On the daily chart, the index formed a candle with a lower wick, indicating initial profit booking followed by sustained buying interest throughout the session. Nifty also ended the second consecutive week on a positive note following eight consecutive weeks of decline, suggesting renewed buying interest at lower levels.

The 22980–23000 zone, near the 25-day EMA, will act as immediate support. A decisive breakdown below this range could trigger short-term profit booking towards 22850. On the upside, the 23300–23320 zone, near the 50-day EMA, is likely to act as a hurdle. Sustained momentum above this range could accelerate the ongoing recovery towards higher levels.

Ajit Mishra, SVP – research, Religare Broking

Markets will react to the quarterly earnings of major banking players, including HDFC Bank, Axis Bank and ICICI Bank, in early trade on Monday, alongside developments on the global front over the weekend. From a technical perspective, the Nifty is approaching the 23,300 mark, and a decisive breakout above this level could extend the recovery towards 23,500–23,700.

On the downside, the 22,700–22,900 zone is now expected to provide support. Given the mixed cues and the busy earnings calendar, we maintain a positive yet cautious stance, with an emphasis on selective stock picking and disciplined trade management.