Benchmark indices started the day slightly weaker on Thursday despite positive global cues and India reporting a record low retail inflation of 0.25% in October. By 9:21 am, the Sensex had dropped 143 points to 84,323, and the Nifty50 was down by 60 points at 25,816. The broader markets also showed some pressure, hinting at profit-taking following recent gains.
Dr. VK Vijayakumar, the Chief Investment Strategist at Geojit Financial Services, emphasized the need for additional triggers to propel the market to new highs. He mentioned that with the Bihar election results already factored in, there are no significant political catalysts to drive the market considerably upward.
Vijayakumar highlighted the potential for an India–US trade agreement and the substantial decrease in inflation as factors that could prompt an RBI rate cut in December. However, he expressed concerns over the weakening transmission of monetary policy.
Anticipating market consolidation in the short term, Vijayakumar suggested that fresh cues could lead to significant market reactions. He mentioned that a convergence of positive triggers might trigger short-covering, propelling the market upward. Nevertheless, he cautioned that sustained growth could be challenging due to Foreign Institutional Investors (FII) selling and elevated valuations.
Analyzing the technical aspects, Anand James, the Chief Market Strategist at Geojit, pointed out a doji pattern in the previous session, indicating caution. He projected the Nifty’s potential movement towards 26,130–26,550 while advising that a failure to maintain levels above 25,840 could turn the market sentiment bearish, with a drop below 25,630 exacerbating the situation.
Prashanth Tapse, the Senior VP (Research) at Mehta Equities, remained optimistic, predicting that the Nifty is aiming for its all-time high of 26,277. He attributed this optimism to global market strength, lower inflation, expectations of a US–India trade agreement, and prospects of a resolution to the US shutdown. Despite FIIs selling Rs 1,750 crore on Wednesday, Tapse identified support at 25,500, with a breakout above 26,107 likely to pave the way for new highs.
Investors are keeping a close eye on the Bihar election results, expected on Friday, as they could impact market sentiment. Stocks such as Adani Enterprises, BSE, Tata Motors CV, BLS International, Zaggle, GSFC, and Reliance Infra are likely to be in focus following strong Q2 performances.