Indian Markets Begin Week on Cautious Note
The Indian stock market commenced trading on Monday with minimal movement, continuing its recent sideways pattern as investors adopted a wait-and-see approach ahead of crucial domestic and international developments. Both benchmark indices recorded marginal gains during early trading sessions.
The Nifty 50 index opened at 25,503.50, showing a modest increase of 11.20 points or 0.04%, while the BSE Sensex began at 83,350.35, climbing 134.07 points or 0.16%. Despite the subdued opening, market analysts maintain optimism about potential upward movement in the coming days, supported by foreign brokerage upgrades and ongoing corporate earnings reports.
Election Uncertainty Weighs on Investor Sentiment
Market participants are exercising caution primarily due to the impending Bihar election results. Exit polls for the Bihar elections are scheduled for release after market hours on November 11, with the official outcome set to be declared on November 14. This political event has prompted investors to maintain conservative positions earlier in the week.
According to Dharmesh Shah, Vice President at ICICI Securities, volatility is expected to remain elevated due to the Bihar election outcome, which could significantly influence market direction. The equity benchmark recently experienced a downward trend, with the Nifty 50 declining 0.8% to settle at 25,500 during the previous truncated week. Small-cap stocks faced more substantial pressure, dropping 1.5% weekly.
Market Outlook and Technical Analysis
ICICI Securities anticipates the Nifty 50 to consolidate within a broader range of 25,800-25,100 amid stock-specific activity as the earnings season approaches its conclusion. The weekly price action formed a bear candle with lower high-low patterns, indicating a pause in the upward momentum.
Shah recommends focusing on accumulating quality stocks during market dips, particularly those backed by strong earnings performance. Key support is positioned at the 25,100 level, while a decisive close above the previous session's high is necessary to halt the current downward trend. Sustainability above the immediate resistance of 25,800 could revive upward momentum, potentially opening the path toward the life high of 26,300 by December 2025.
Several factors support this positive outlook: the past three weeks' 800-point decline represents a healthy retracement of October's 1,500-point rally; the Midcap index demonstrated relative outperformance despite global volatility; and the absence of earnings disappointment has provided market cushioning.
Sector Performance and Key Monitorables
Sectoral performance showed mixed trends, with PSU Banks continuing their upward journey while IT and Metal sectors underperformed. Looking ahead, BFSI, Auto, and Metal sectors are expected to maintain their northbound trajectory.
Key factors that market participants should monitor include:
- Bihar Election outcome and its political implications
- Progress in India-US tariff negotiations
- US Dollar Index movement, with follow-through weakness potentially benefiting emerging markets
Stock Recommendations from ICICI Securities
Dharmesh Shah of ICICI Securities has identified two stocks for potential investment this week:
Bharat Electronics Ltd (BEL): Investors can consider purchasing shares in the price range of ₹405-417. The analyst has set a price target of ₹466 with a stop loss at ₹385.
Union Bank of India: The recommended buying range is ₹147-153, with a price target of ₹168 and a stop loss positioned at ₹138.
Historical data indicates that November has typically provided positive returns with a 66% strike rate, averaging over 2% returns since 2000, offering additional optimism for market performance in the coming weeks.
