SBI Capital Markets said the economy showed a sharp recovery, supported by a 7.9% rise in private consumption and steady rural spending. Urban consumption, it added, is gaining momentum as GST rationalisation filters through. Nominal GDP grew 8.8% in the quarter, giving companies a supportive backdrop for earnings.
The upbeat combination of strong real growth, healthier capex trends and broad-based demand recovery is expected to keep equities supported in the near term.
VK Vijayakumar, chief investment strategist at Geojit Investments, said the upside surprise has come “as a shot in the arm for bulls,” noting the 9.1% expansion in manufacturing and 7.3% increase in gross fixed capital formation.
He said the strength in consumption, reflected in a 7.9% rise in expenditure, could reignite investment demand as well. According to him, the print has the potential to halt foreign investor selling and even pull FIIs back into India at a time when global markets are searching for stable growth engines.
Vinod Nair of Geojit said the GDP beat will help support sentiment at the start of the week, even though investors will be watching a heavy macro calendar that includes India and US PMI data, US core PCE inflation and the upcoming RBI policy decision. With domestic growth strong and credit demand improving, he expects the medium-term outlook to stay positive, though short-term volatility could persist around global and central bank events.On the technical front, analysts expect the Nifty to hold its positive structure. Bajaj Broking said the index continues to trade within a rising channel and may gradually move toward 26,500 if momentum holds.It identified 26,000 as immediate support, with the 25,800–25,700 band emerging as a crucial short-term zone because it aligns with key moving averages, the lower edge of the two-month channel and recent lows. Staying above these levels, it said, keeps the bias comfortably positive.
Ajit Mishra, SVP of research at Religare Broking, said the market’s medium-term setup remains constructive as global rate-cut expectations firm up and India’s domestic growth outlook strengthens. He expects near-term swings as macro data flows in, but believes investors should maintain a buy-on-dips stance, especially near important support areas. He also said large caps remain the safer option in the current environment and that traders should keep trailing stop-losses to protect gains.
Last week, the markets extended their winning streak for the third straight week and touched fresh record highs. Early profit-taking was followed by a sharp midweek rebound and steady consolidation. By Friday, the Nifty closed at 26,202.95, up 0.52%, while the Sensex advanced 0.56% to 85,706.67.
The drivers included rising expectations of a December rate cut by the US Federal Reserve, improved global sentiment and optimism around progress in Russia-Ukraine negotiations, which helped cool crude concerns. Domestic optimism around growth and sector-specific resilience added to the strength, even as export-related worries kept the upside in check.
All in all, Monday is likely to open firm as markets respond to the GDP surprise. The week may still experience bouts of volatility because of global data and the RBI’s policy stance, but the broader picture remains favourable.