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Informist, Friday, Sept. 12, 2025

By Gopika Balasubramanium

MUMBAI – Domestic equity indices are likely to continue their bullish rally in the coming week, analysts said. However, they expect the market to be volatile during the second half of the week, given that several central banks, including the US Federal Reserve, are scheduled to announce their monetary policy decision. Market sentiment remains positive amid reports of progress in trade talks with the US. A potential trade deal with the EU will also support market sentiment. 

"Overall, the near-term market outlook remains constructive, albeit with potential volatility around central bank events, while progress in India–US trade negotiations could provide an additional boost to investor confidence," Siddhartha Khemka, head of research, wealth management, Motilal Oswal Financial Services, said in a note. Further, interest rate decisions from the Bank of England and Bank of Japan will also be closely tracked for their implications on global liquidity and risk sentiment, he added.

Friday, the Nifty 50 closed at 25114 points, up 108.50 points or 0.4%, extending gains for the eighth session in a row, its longest rally since August last year. The 50-stock index had crossed and sustained the crucial 25100 points mainly due to gains in index heavyweight ICICI Bank during the second half of the session. The index has closed higher for the second straight week, gaining 1.5% this week. This week's gains were also the highest in the last 10 weeks. Technical analysts had said that a move above 25100 points will attract fresh buying interest among the investors, taking the Nifty 50 to 25200-25250 points. Technical analysts see 24900 points as a crucial support level in the near term.   
 

ICICI Securities expects the Nifty 50 to reach 28500 points by the end of June 2026. "Going ahead, we expect Nifty (50) to extend the ongoing upward momentum and challenge the all-time high of (about 26300) that would pave the way towards our envisaged target of 28500 by June 2026. Hence, buy on dips would be the prudent strategy to adopt as strong support is placed at the 22900-22500 zone," the brokerage said in a technical outlook note on Friday. The market tends to perform well after the Reserve Bank of India's repo rate cut, it said, and added that historically, returns are better in the second half of the year. Meanwhile, Emkay Global Financial Services on Monday had said it remains positive on the markets and upholds its September 2026 target of 28,000 for Nifty 50. The brokerage said autos were the best way to play the GST rejig.   

Data released after market hours Friday showed that domestic retail inflation rose to 2.07% in August from 1.61% in July. This is the seventh consecutive month when CPI inflation stayed below the RBI's medium-term target of 4.0%. India's inflation remains below trend, which is likely to support private demand and facilitate additional monetary policy easing by the RBI, partially mitigating the impact of tariff-related uncertainty on growth, Hanna Luchnikava-Schorsch, head of Asia-Pacific economics, S&P Global Market Intelligence, said in a note.

On the geopolitical front, reports said that the European Union has rejected US President Donald Trump's suggestion to levy a 100% tariff on India and China as a punishment for buying oil from Russia. The EU is yet to make any official comment on it. India is currently holding negotiations with the EU for a free trade agreement and is likely to sign the agreement by the end of this year. 

Investors will also focus on the decision of the US Federal Reserve at its two-day monetary policy meeting starting Sept. 16. The US Federal Open Market Committee is widely expected to cut the federal funds rate by 25 basis points. The committee had left the federal funds rate target range unchanged at 4.25-4.50%, after cutting by 25 bps in December.   End

Edited by Saji George Titus

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