Indian equity benchmarks extended their upward momentum for a second consecutive week, buoyed by encouraging second-quarter earnings, easing inflation and renewed optimism surrounding India–US trade negotiations.
The Nifty rose 0.68 per cent to close at 26,068 while the Sensex gained 0.50 per cent, ending the week at 85,231.
Analysts noted that signs of moderation in foreign institutional investor (FII) selling helped support sentiment.
Expectations of earnings upgrades in the second half of FY26 have also contributed to improved market confidence.
However, volatility crept in on Friday as global cues turned unfavourable, prompting profit booking.
The Nifty slid after failing to surpass its previous all-time high of 26,277, bringing its two-day winning streak to an end.
Broader Markets Underperform
While frontline indices managed gains, the broader market faced pressure.
The Nifty Midcap100 declined 0.76 per cent over the week, while the Nifty Smallcap100 fell sharply by 2.2 per cent, reflecting risk aversion in non-blue-chip segments.
Sectoral performance was mixed. IT stocks, despite facing selling pressure due to weakness in US technology shares, emerged as the biggest weekly gainer.
Nifty Auto and Services indices also recorded positive weekly returns. Conversely, metals and realty stocks suffered significant losses on Friday, each shedding over 2 per cent.
PSU banks, financial services and media stocks were also among the laggards.
Global Factors Weigh on Sentiment
A stronger-than-expected non-farm payroll report from the United States dampened hopes of a Federal Reserve rate cut in December, exerting downward pressure on global equity markets.
As a result, gold prices softened, and the Indian rupee weakened to a new low.
Oil prices also slipped as the US renewed its push for a Russia–Ukraine peace proposal, adding further uncertainty to energy markets.
Market experts warned that persistent pressure on the Indian rupee could trigger profit booking in the near term.
“The market may witness some profit booking in the near term if the pressure on the Indian rupee persists. In the week ahead, investors will also keep a close watch on trade developments and key economic indicators such as the Index of Industrial Production (IIP) and the Q2 FY26 GDP data to gauge market direction,” said Vinod Nair, Head of Research at Geojit Investments.
Despite short-term challenges, analysts expect the markets to retain their overall firm tone next week.
Buying on dips, improving demand prospects in the third quarter, and resilient institutional flows are likely to support sentiment.
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