Long-Term Outlook for Indian Stock Market Remains Strong Despite Geopolitical Risks
Despite continued selling pressure from foreign institutional investors (FIIs) amid geopolitical tensions, experts maintain that the long-term outlook for the Indian stock market remains strong, driven by stable growth and an uptick in capital expenditure.
This week, the market faced headwinds from heavy FII selling, muted Q2 earnings expectations, and elevated valuations. Market analysts predict a range-bound market in the short term, encouraging investors to adopt a more sector- and stock-specific approach.
Key focus areas include large-cap stocks and growth sectors such as staples, agriculture, FMCG, consumption, power, digital, and infrastructure. Experts recommend a “buy-on-dips” strategy for short- to medium-term investments.
Rajesh Bhosale, an equity technical analyst at Angel One, noted that the market is currently in a consolidation phase with minimal changes in its chart structure. “While prices have tested the lower end of the trading range, a break below 24,900 could lead to further declines, potentially hitting the 24,700 level. On the upside, resistance is seen around 25,100 and 25,250; only a breakout above this range could trigger bullish momentum,” he explained.
On Friday, the Indian stock market defied the negative trend, with both the Sensex and Nifty indices posting gains. The Sensex closed at 81,224.75, up 218.14 points (0.27%), while the NSE Nifty ended at 24,854.05, gaining 104.20 points (0.42%). The Nifty Midcap 100 index also rose to 58,649.15, up 183.20 points (0.31%), and the Nifty Smallcap 100 index closed at 19,077.80, with a slight gain of 11.85 points (0.06%).
For the upcoming week, traders are advised to avoid aggressive positions and be selective. It’s crucial to monitor global factors closely, as they could significantly impact market direction ahead of the weekly expiry.
Geopolitical tensions and uncertainty ahead of the US presidential election have driven gold prices to new record highs. Gold prices surged by Rs 500 in the MCX, reaching Rs 77,600, supported by Comex gold rising above $2,710. This upward momentum is primarily fueled by expectations of ongoing interest rate cuts in the US, with further reductions likely in the near term.
The Indian rupee remained stable at 84.05 as the dollar index held steady around 103.50. Jateen Trivedi from LKP Securities noted, “Despite the dollar’s broader strength, the rupee has managed to remain stable for now. However, heavy fund outflows may push the rupee down towards the 84.15-84.25 range in the coming days.”
