MUMBAI: The Indian equity benchmarks ended the week decisively higher amid short covering from foreign institutional investor (FII) participants and resilient domestic cues.
Market optimism was bolstered by clarity in the India–US trade relations, with both sides tentatively agreeing to conclude the first phase of the deal by November.
The sentiment remained upbeat as Bank Nifty achieved a new milestone, driven by robust buying interest in leading banking stocks. Investor confidence was buoyed by easing concerns around asset quality in the financial sector and expectations of improved volume growth in the festive quarter.
Benchmark indices Nifty and Sensex rose 2.10 and 2.04 per cent during the week, with FMCG, pharma, and auto indices being the major contributors to the rally.
Analysts said that consumption-driven sectors also saw a surge along with a broad-based recovery across realty, healthcare, and banking.
IT stocks remained under pressure due to global discretionary spending concerns and mounting asset quality stress in the US banking system.
Profit booking was also seen in media, and metal stocks, which capped the overall upside of the indices.
The broader market, however, took a breather after a strong run-up, with Nifty Midcap 100 slipping 0.57 per cent and Nifty Small-cap 100 marginally down by 0.05 per cent, indicating selective profit taking by investors.
"Nifty on the weekly chart has formed a sizable bull candle with a higher high and higher low, signalling continuation of the up move. The index broke out above a three-month symmetrical triangle consolidation pattern, indicating a positive bias," analysts from Bajaj Broking Research said.
They expect the index to head towards 25,900 and then towards 26,200 levels in the coming weeks.
In the holiday-led truncated Diwali week, investors are likely to remain cautious in view of the release of key economic data, such as US inflation, employment, and India’s PMI figures.
Investors are also keen on the cues from the ongoing earnings season and policy signals from major global central banks.