Mumbai, Sep 13 The Indian equities displayed strong bullish momentum this week on hopes of stronger H2 FY26 earnings, driven by GST rationalisation and the benefits of monetary easing.
Benchmark indices Nifty and Sensex ended the week with a gain of around 1.32 per cent and 1.21 per cent, respectively, with the rally driven by auto and IT stocks. Midcap and smallcap stocks outperformed the benchmark indices.
The IT index exhibited its rally, driven by renewed hopes of a Fed rate cut, Infosys’ buyback announcement, and optimism over a revival in technology spending.
The Nifty advanced 373 points forming a robust bullish candle. Analysts said that, on the weekly chart, the index has broken out of a symmetrical triangle pattern with conviction, signalling the potential for further upside.
"The Nifty has shown resilience by holding firmly above the 25,100 mark, closing at 25,114. It continues to trade above its key EMA levels—underscoring the broader bullish undertone," according to Choice equity broking. Immediate resistance levels are placed at 25,160, followed by 25,250 and 25,500 zones. Immediate support is seen at 25,000 and then at 24,900 zones.
In contrast to the IT sector, consumer-focused sectors such as auto and FMCG advanced, supported by expectations that GST cuts will boost domestic consumption and aid demand recovery, said Vinod Nair, Head of Research, Geojit Investments Limited.
Domestic CPI inflation registered a slight uptick and continued foreign outflows weighed on the rupee. Gold reached fresh highs on strong safe-haven demand amid global trade tensions.
This week, US retail inflation rose to 2.9 per cent in August, marking the highest rate since January. Core inflation, excluding food and energy, held steady at 3.1 per cent. The market focused on the slowdown in job gains and the potential for accelerated Fed easing. The yield on the 10-year US Treasury note dropped to 4 per cent, marking the lowest level since April.
Several analysts have cautioned the Fed against lowering rates amid persistent high inflation but indicated that the writing on the wall is clear. With United States' CPI inflation in August, along with a sharp downturn in labour market dynamics led they anticipated a 25-basis-point cut at next week’s FOMC meeting and expect approximately three cuts in total for 2025.
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