Stock market sentiment is likely to remain optimistic going ahead, though some consolidation cannot be ruled out after the recent sharp rally in the benchmarks, analysts said.
Photograph: Francis Mascarenhas/Reuters
According to experts, the Nifty and Sensex could indeed move towards new record highs before the end of the year, if global cues stay supportive, crude oil prices remain benign and there is continued domestic earnings momentum.
The 30-share BSE Sensex jumped 3,671.09 points or 4.57 per cent in October, while the 50-share NSE Nifty surged 1,111 points or 4.51 per cent.
Both the benchmark indices hit their 52-week highs on October 23.
“The sharp rebound in October was driven by a combination of strong corporate earnings, steady FII (Foreign Institutional Investors) inflows, easing global bond yields, and optimism over rate cuts in 2025.
“Going forward, market sentiment is likely to remain constructive, though some consolidation cannot be ruled out after the recent upmove,” Pravesh Gour, Senior Technical Analyst, Swastika Investmart, said, adding that since valuations are now on the higher side, investors may witness bouts of volatility and sectoral rotation rather than a broad-based rally.
Foreign investors turned net buyers with a net infusion of Rs 14,610 crore in October, after withdrawing money for three months in a row.
Siddhartha Khemka – Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd, said, “Going ahead, markets are likely to remain range-bound with a positive bias as investors monitor global developments, foreign fund flows…
“Resilient domestic fundamentals continue to offer support, even as external uncertainties may cap near-term upside.”
Festive season demand in consumption-led sectors and heavy FII and DII (Domestic Institutional Investors) buying last month also added to the markets’ optimistic trend, an expert said.
Swapnil Aggarwal, director, VSRK Capital, a wealth management company, said, “The over 4.5 per cent surge in both the Sensex and Nifty last month was primarily driven by improved market sentiment following the government’s recent GST reforms.”
Top carmakers led by Maruti Suzuki, Mahindra & Mahindra, Tata Motors Passenger Vehicles and Kia India reported record sales in October in the domestic market, riding on festive demand boosted by the GST rate cut.
Other manufacturers such as Skoda Auto India and Toyota Kirloskar Motor also posted impressive growth in sales in October.
When asked how hopeful he is of the domestic market ending the year 2025 on a buoyant note, Gour said, “Yes, there is a fair reason to be optimistic about the domestic market ending 2025 on a buoyant note.”
India’s economic fundamentals remain strong, supported by steady GDP growth, healthy corporate earnings, and robust infrastructure spending, he noted.
“The government’s continued focus on manufacturing, capital expenditure, and policy stability is likely to sustain investor confidence,” Gour added.
