On October 3, 2025, Indian benchmark indices concluded the trading session on a positive note, reflecting a wave of optimism for the forthcoming week. The Sensex experienced a notable increase of 223.86 points, or 0.28%, ultimately settling at 81,207.17. Meanwhile, the Nifty gained 57.95 points, equivalent to a 0.23% rise, closing at 24,894.25.
As market participants gear up for the upcoming week, they are eager to observe whether this upward trend can sustain its momentum. Sudeep Shah, Vice-President and Head of Technical and Derivatives Research at SBI Securities, provided valuable insights regarding potential market movements for investors.
Nifty Indicates Potential for Recovery
Shah commented, “The Nifty concluded the shortened trading week positively, ending at the 24,894 mark, reflecting a gain of 0.97%, which was bolstered by a rebound towards the end of the week. The daily chart revealed a Record Session Count candlestick pattern, suggesting the beginning of a recovery rally.”
He further noted that the positive momentum observed during the last two trading sessions has heightened optimism, indicating a possibility of continued recovery in the upcoming week.
A significant factor driving this upward movement was the Bank Nifty, which rose over 2%, forming a substantial bullish candlestick on the weekly chart. Shah pointed out that the Bank Nifty to Nifty ratio reached a 30-session peak, underscoring the strength within the banking sector. Major banks like Kotak Mahindra Bank, Axis Bank, and HDFC Bank significantly contributed to boosting investor confidence. Additionally, the Nifty IT index, which had previously been in a corrective phase, showed signs of stabilization, alleviating downward pressure and aiding the broader market’s recovery.
Essential Levels for Nifty to Monitor
Shah elaborated that the range of 25,050 to 25,100 will serve as a pivotal barrier, aligning with the 61.8% Fibonacci retracement level of the recent decline. A decisive move above 25,100 could ignite a more pronounced recovery rally, potentially targeting 25,400.
Conversely, the support zone between 24,600 and 24,550 is crucial. A breach of this area could lead to renewed selling pressure, which might hinder the recovery efforts.
Bank Nifty Drives Market Resurgence
Shah highlighted the remarkable performance of the banking sector, stating, “The Bank Nifty has shown exceptional results this week, significantly outperforming broader market indices. The banking benchmark soared over 2%, closing above 55,500, marking its highest weekly close since the last week of July 2025.”
Key players in the banking sector, including Kotak Mahindra Bank, Axis Bank, and HDFC Bank, were instrumental in driving the rally, positively influencing sector sentiment. Technically, the daily Relative Strength Index (RSI) is nearing the 60 level, indicating a strengthening trend.
Looking forward, Shah anticipates that the Bank Nifty will maintain its upward trajectory, with expectations to test levels of 56,200 and then 57,000 in the near term.
Technical Analysis of Sensex
The Sensex exhibited a commendable recovery following a period of weakness, concluding the week on a positive note. The daily chart displayed a Three Outside Up candlestick pattern, signaling a bullish reversal, while regaining the 100-day Exponential Moving Average (EMA) bolsters the validity of the ongoing recovery.
Momentum indicators are showing improvement, with the daily RSI climbing from 37.57 to 48.77, suggesting that bullish forces are gaining ground. Critical levels to monitor include resistance positioned between 81,300 and 81,400, with potential upward targets ranging from 82,100 to 82,600. Support levels are anticipated around 80,500 to 80,600.
The Influence of Institutional Flows on Market Sentiment
Shah remarked, “Foreign Institutional Investors (FIIs) have been net sellers in recent months. In September 2025, FIIs withdrew approximately ₹35,301 crore from Indian equities, marking the continuation of a prolonged exit trend. However, Domestic Institutional Investors (DIIs) have stepped in robustly, registering net inflows of ₹2,21,111 crore over the past three months, providing crucial support to the markets.”
He also emphasized that domestic inflows, driven by retail participation and policy backing, enhance market stability. Nevertheless, external factors such as fluctuations in interest rates, the strength of the US dollar, and global trade tensions may pose challenges to further gains unless foreign investments return.
Key Sectors to Monitor in the Coming Week
From a technical standpoint, Shah predicts that sectors such as Nifty Metal, PSU Banks, Private Banks, CPSE, PSE, and Financial Services are likely to outperform in the short run. Conversely, sectors including Nifty IT, Consumer Durables, FMCG, Pharma, Healthcare, and Realty may experience underperformance.
Stocks to Keep an Eye On
Investors are advised to monitor stocks such as Kotak Bank, Bharat Electronics, BHEL, Canara Bank, Punjab National Bank, JSW Steel, Tata Steel, National Aluminium, Shyam Metalics, and Minda Corp, all of which are demonstrating strong technical setups and may benefit from sector-specific rallies.
The Indian stock market wrapped up the week on a positive note, driven by a robust rebound in banking stocks and signs of stabilization in the IT sector. Investors will closely monitor the Nifty’s ability to break through the 25,100 resistance level in the coming week. Sustained domestic inflows, combined with sectoral strength, could further propel a short-term recovery rally, although external challenges remain a significant risk factor.
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