Did Nifty and Sensex Just End Their 4-Week Winning Streak Due to Profit Booking?
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Synopsis
The Indian equity market's four-week winning streak has come to an end, with Nifty and Sensex closing lower due to profit booking. As investors navigate mixed global cues, the upcoming week promises key economic data that could influence market trends.
Key Takeaways
- Nifty and Sensex ended their four-week winning streak.
- Market sentiment was influenced by profit booking.
- US Federal Reserve's interest rate cut raised caution.
- Positive domestic economic data initially supported optimism.
- Investors are looking for cues from upcoming economic indicators.
Mumbai, Nov 1 (NationPress) The Indian equity benchmarks have concluded their four-week winning streak, witnessing a slight decline this week driven by profit-booking and mixed signals from global markets.
The benchmark indices Nifty and Sensex fell by 0.65 and 0.55 percent, respectively, closing at 25,722 and 83,938.
Initially, market sentiment was lifted during the first three trading sessions thanks to positive domestic economic indicators and China's endorsement for several Indian firms to import rare earth magnets.
However, caution set in following the US Federal Reserve's decision to reduce its benchmark interest rate by 25 basis points, bringing it down to the range of 3.75%–4%.
Ajit Mishra, SVP of Research at Religare Broking Ltd., remarked, "India's industrial output saw a 4 percent YoY increase in September 2025, bolstered by robust manufacturing activity. The Fed's indication that the 25-bps cut might be the last for 2025 has tempered expectations for further easing in the near term."
Moreover, steady corporate earnings and ongoing FII inflows throughout October provided some support against the downturn.
Metals, energy, and realty stocks were the primary drivers of the previous rally, whereas auto, pharma, and IT stocks faced profit-taking.
Vinod Nair, Head of Research at Geojit Investments Limited, noted, "While PSU banks surged on news of potential increases in foreign investment limits, metal stocks shone due to renewed optimism following China's commitment to manage steel overcapacity and positive signs in US-China trade discussions."
Analysts indicated that capital market stocks experienced a loss of momentum as SEBI's proposed changes to TER structures weighed on investor sentiment.
The support for Nifty is currently positioned around the 25,600 and 25,400 levels, while resistance is noted around 26,100.
In the upcoming week, which is shortened due to holidays, investors are anticipating insights from the final readings of the HSBC Manufacturing PMI and HSBC Services and Composite PMI data.
Investors are also focusing on the India-US trade deal and developments in developed markets, while several index heavyweights are expected to release their quarterly results.
Point of View
The recent decline in the equity benchmarks reflects the inherent volatility in the markets. While profit booking is a natural phenomenon after a winning streak, the underlying economic indicators and global cues will be crucial in determining future trends. We remain committed to providing insightful analysis as the market landscape evolves.
NationPress
01/11/2025
Frequently Asked Questions
Why did Nifty and Sensex end their winning streak?
The decline was primarily attributed to profit booking by investors and mixed signals from global markets.
What are the current levels of Nifty and Sensex?
Nifty closed at 25,722 and Sensex at 83,938.
What economic data should investors watch for?
Investors should look for final readings of the HSBC Manufacturing PMI and HSBC Services and Composite PMI data.
How did the US Federal Reserve's decision impact the market?
The Fed's cut in the benchmark interest rate raised caution among investors, impacting overall market sentiment.
Which sectors showed volatility this week?
Metals, energy, and realty stocks saw gains, while auto, pharma, and IT stocks experienced profit-taking.
