Benchmark indices continued their upward trend for the sixth consecutive week, boosted by strong IT earnings. At 09:15 am, the Sensex was up 187.39 points or 0.23 percent at 80,706.73, and the Nifty was up 64.70 points or 0.26 percent at 24,566.90.

Analysts anticipate that pre-budget deliberations will add to market fluctuations, underscoring the potential impact of fiscal policy discussions on market sentiment.

Key results this week include Jio Financials, HDFC Life, Asian Paints, LTI Mindtree, Infosys, Havells, Wipro, JSW Steel, Paytm, etc. Also globally, investors will take cues from China’s Q2 GDP numbers, US Core Retail Sales data, and ECB interest rate decisions.

The global support for the market rally in India continues. The US is leading this rally with 18.4 percent returns YTD in the S&P 500 compared with 12.7 percent YTD returns in Nifty. The latest inflation data in the US indicates a rate cut by the Fed in September. This is likely to keep the US market buoyant with a positive impact in India, too, said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

"However, valuations in India are moving to elevated levels. Investors have to be cautious about the excessive valuations in the momentum stocks which are moving to frothy levels," he said.

IT results from TCS and HCL Tech indicate improving prospects which the market is discounting now. But the growth projections of IT companies remain low and, therefore, a sharp restart from the present levels is unlikely, Vijayakumar said, adding that financials remain the fairly valued segment of the market. The decline in the US 10-year bond yield is positive for FII inflows.

Fundamental View

Despite the overall positivity, increased volatility during the earnings season and budget-related discussions are normal. Hence, a hedged approach is advisable, especially for overnight leveraged positions, along with careful monitoring of position sizes, according to Ajit Mishra – SVP, Research, Religare Broking Ltd.

"We recommend focusing on IT, energy, FMCG, and pharma for long trades. For themes like railways, defense, and other select PSUs, which have seen significant recent gains, traders should maintain extra caution and suggest trailing stop losses on the rise," he said.

Technical View

Nifty has been moving within a tight range between 24,150 and 24,450 levels for quite some time and currently, a positive bullish candle formation has indicated a breakout to come out of the consolidation zone improving the trend, and further rise is anticipated. The index would have the next higher targets of 24,900 and 25,600 levels with the 24,000 zone maintained as the crucial support, said Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher.

Bank Nifty index needs to breach above the 53,300 zone to trigger for fresh breakout and expect further rise with a target of 55,100 levels visible. The support for the week is seen at 79,600/24,200 levels while the resistance would be at 81,500/24,800 levels. Bank Nifty would have a weekly range of 51,300-53,200 levels, Parekh said.