Last week too, both benchmark indices posted healthy gains. The Nifty jumped 1.68% to close at 25,709.85, while the Sensex rose by 1,451.37 points, or 1.76%, to settle at 83,952.19.
Analysts point out that the technical outlook remains bleak, as the corrective trend continues for the eighth consecutive session. From a technical standpoint, the 89-day DEMA represents a significant obstacle for the benchmark index, which bulls have struggled to surpass in three consecutive sessions.
On the levels front, the next potential support level is identified around the 24,500 zone, with a subsequent support level at the recent swing low of 24,400. Conversely, significant resistance has been established in the range of 24,750-24,800.
Against this backdrop, here are the key factors likely to influence market movement when trading resumes this week:
- Truncated trading week: The upcoming truncated trading week will be event-heavy, with several key triggers lined up for investors.
- Investor reaction on earnings from index heavyweights: Market participants will first react to quarterly earnings from heavyweights such as Reliance Industries, HDFC Bank, and ICICI Bank, which are likely to set the tone for the broader market.
- Muhurat trading: On October 21, the one-hour Diwali Special Muhurat Trading session, marking the beginning of Samvat 2082, will be closely watched for sentiment cues and festive cheer, with strong retail and institutional participation anticipated.
- Q2 earnings pick up: The Q2FY26 earnings season will continue in full swing, with major companies including Colgate, Hindustan Unilever, Dr. Reddy’s Laboratories, SBI Life Insurance, Coforge, and Kotak Mahindra Bank scheduled to report their results. These announcements will offer vital insights into margin trends, demand strength, and sectoral performance as India enters the festive quarter.
- Global developments: Globally, developments around the proposed U.S. tariffs on China will be closely monitored.
- Currency watch: The rupee’s two-day rally was snapped by bargain buying from importers and hedgers looking to secure dollars ahead of the holiday-shortened week. This fresh demand spiked following the recent appreciation, indicating the market views current levels as favorable for dollar accumulation.
- Crude prices: Brent is trading near $60/bbl and WTI near $57/bbl, pressured by rising US-China trade tensions, the potential Russia-Ukraine truce, growing oversupply concerns, and elevated Iranian floating stocks above 31 million barrels, highlighting a delicate balance between supply resilience, geopolitical tensions, and fluctuating demand in the global crude market.
- Technical view: Nifty has surpassed the crucial swing high resistance of 25,669, registered on 30th June 2025. Nifty has regained the momentum after breaking out of the symmetrical triangle pattern on the weekly chart.
With this setup, Nandish Shah – Deputy Vice President at HDFC Securities states that Nifty is poised to challenge its all-time high of 26,277, while near-term support is positioned around 25,450, where the 5-day exponential moving average (DEMA) aligns with the previous swing high.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)