By V K Sharma
The markets climbed the wall of worries and scaled fresh all-time highs last week, as anticipated earlier. The Nifty hit a new intraday peak of 26,310 on Thursday, surpassing the previous high of 26,277 set on September 27, 2024 — some 14 months ago. The index closed the week 0.52% higher at 26,202, marking its third consecutive weekly gain.
Adding to the cheer, India’s real GDP growth data released on Friday after market hours came in at a robust 8.2% for Q2, beating both Q1’s 7.8% and market expectations of 7.4%. The numbers reaffirm India’s position as the world’s fastest-growing major economy and further buoyed sentiment in large caps.
The better-than-expected GDP print may lessen the chances of a rate cut in this week’s Monetary Policy Committee meeting, though a modest 0.25% reduction remains possible given the benign inflation trend.
Technically, the Nifty is above all key moving averages from five to 200 days, and having closed above its 14-month high, it now sits in a relatively resistance-free zone. Wednesday’s 373-point green candle proved pivotal, engulfing the prior three sessions’ declines. The 25,842 mark, the week’s low, now forms a strong support level aligned with a key trendline, while the index could target the 26,550–26,650 region on the upside.
The Bank Nifty, which gained 1.5% for the week, appears on an even firmer footing. Unlike the Nifty, which reclaimed its high after 14 months, the Bank Nifty had already made new highs in April, May, October, and again in November. The Midcap Index too touched a fresh high on Thursday.
However, the broader market continues to lag. The Nifty Small Cap index slipped 0.10% for the week and 3% for the month. Nearly 38% of listed stocks are trading below their 20-day exponential moving average (DEMA), and 43% are below their 100-day DEMA — leaving retail investors puzzled amid headline exuberance.
Yet, viewed from a wider post-Covid lens, small caps had already seen an unprecedented surge between 2021 and 2024. That torrid phase makes the current phase of large-cap outperformance a healthy and expected rotation.
With the winter session of Parliament beginning today and President Putin’s visit to India later this week, markets will stay watchful — but for now, stay invested.
