Bottom Not Confirmed Yet, Outlook Remains Uncertain For Indian Market

Indian market witnessed a volatile session on Tuesday where the benchmark NIFTY index gained around 1.4 per cent midday while witnessing selling pressure from the top during the closing bell and erased most of the gains. The index dropped from an intraday top of 23,780 to 23,464, and settled at 23,518, up a marginal 0.285 since the previous session’s closing. In the broader market, the NSE witnessed buying in almost 95 per cent scrips today while selling pressure at the closing hour pushed the advance-decline ratio to 1628/846.

The daily closing of the index has turned out indecisive, with a broad range for the market from 23,300-23,800 levels. 

The review of Indian corporate earnings showed, that NIFTY companies witnessed two straight quarters of single-digit growth in earnings, which may prompt a cut in guidance for FY26. Many fear whether the NIFTY EPS expectation of 1,200-1,250 shall be met or not.

The NIFTY index is currently trading at a PE of 21.57 with a median PE of 20.78.  If the NIFTY index drops toward its median PE, then the index value shall be around 22,500. With a forward estimate of 1,200-1,250 EPS for FY26 the NIFTY Index is currently trading at an 18.76-18 PE multiple which is still not cheap. The change in outlook depends on the monetary stance from RBI next year and the Indian budget to be presented in February next year. Hence, the market is in uncertain waters now.

Despite the market remaining uncertain investors should look at quality stocks. We prefer buying in Axis Bank, ICICI Bank, Mahindra and Mahindra, CDSL, CAMS, MCX, and Amber enterprise for at least a time horizon of four to six months for a double-digit return in this corrective phase of the market.

From an Index perspective, the NIFTY Index is expected to stay under a bear grip as long as it holds below the 23900 level and a break below 23,300 may push the index towards the 23,050-100 range. In the case of Bank NIFTY 51,000 shall work as an important resistance level and a daily close above the same may bring in some recovery on cards. Below that the index shall be under bear grip with important support at 50,200 and 49,900 levels.

In the case of Midcap Select, the 12,050-12,000 range is very crucial and if the level is broken the market looks to drop to the 11,850-800 range. The resistance is placed at the 12,250-300 range as of now.

The Indian market is on holiday on 20th November for the election in Maharashtra. 

The report is being prepared by Bitupan Majumdar, an independent SEBI registered research analyst with registration code INH30006962. Please consult your financial advisor before making an investment decision.