US mid-term elections, crude prices to drive stock market in coming week

Mumbai: Indian equity markets staged a strong recovery in the week leading up to Diwali, with benchmark indices gaining nearly 2 per cent amid buying in pharma, IT and select sectors.

Market experts now expect global developments, including US mid-term elections, geopolitical tensions and crude oil price movements, to influence trading sentiment in the coming week.

The Sensex climbed 1,335.70 points, or 1.83 per cent, during the week ended October 30 to close at 74,459.53, while the Nifty advanced 453.10 points, or 2 per cent, to settle at 23,053.10.

Analysts noted that the market began the week on a weak footing, with the Nifty slipping to an intraday low of 22,387.35.

However, strong buying emerged at lower levels, triggering a sharp rebound that enabled the index to end the week comfortably above the 23,000 mark.

From a technical perspective, the Nifty has found strong support near its 200-week exponential moving average (EMA) and a long-term uptrend line, a development that has improved market sentiment in the near term.

Sectorally, the Nifty Pharma index emerged as the top performer, rising about 7.1 per cent during the week. The media and real estate indices followed with gains of 4.3 per cent and 3.8 per cent, respectively.

Metal, auto, FMCG and PSU banking stocks also registered gains ranging between 2 and 3 per cent, while advances in banking and financial services shares remained relatively modest.

According to analysts, the ongoing second-quarter earnings season has led to stock-specific buying across sectors, with investors rewarding companies that delivered stronger-than-expected financial results.

Looking ahead, market experts believe both domestic and global factors will determine the market's direction in the first trading week of November. Key developments being tracked include the US mid-term elections, tensions between the US and Iran, fluctuations in crude oil prices and the remaining corporate earnings announcements.

Technical analysts said the 23,200 level remains a crucial resistance zone for the Nifty. A decisive breakout above this level could pave the way for a move towards the 23,700-24,000 range.

"On the downside, 22,850 is seen as the first major support level. A stronger support zone lies between 22,600 and 22,400, where the 200-week EMA and long-term trendline converge," market experts stated.