Equity benchmarks opened on a cautious note with profit booking at higher levels offsetting support from firm global cues. The Sensex slipped 218.21 points or 0.26% to 85,221.41 after opening at 85,331.14, while the Nifty declined 30.40 points or 0.12% to 26,219.90 after opening at 26,189.70.

Market Performance and Technical Analysis

Despite the decline, analysts maintain a positive medium-term outlook for the markets. Prashanth Tapse from Mehta Equities noted that Nifty "slipped 0.30% to close at 26,250 amid profit booking, despite touching a fresh all-time high of 26,373, signalling a phase of bullish consolidation rather than trend reversal."

Shrikant Chouhan from Kotak Securities highlighted that "after an early morning intraday rally, profit-booking occurred at higher levels, leading to a sharp correction in the market." Key support zones remain at 26,150/85,200 and 26,100/85,000 levels.

Individual Stock Performance

Stock movements showed significant divergence across sectors, with realty and defence stocks emerging as top performers in the previous session while IT sector faced pressure.

Sectoral Trends and Market Factors

Geopolitical concerns and renewed US-India trade tension discussions weighed on market sentiment, though the broader structure remains strong above key moving averages. Defence stocks including HAL, BEL and BDL had gained over 2% in the previous session, while IT majors faced downgrade concerns.

Dr VK Vijayakumar from Geojit Investments noted that "the US markets have largely ignored the Venezuelan crisis and moved ahead" and suggested investors "can think of increasing the cash position in their portfolios, even while remaining invested" given heightened geopolitical uncertainty.

Banking Sector and Commodities Update

The banking sector showed resilience with increasing credit growth momentum, though deposit mobilisation remains challenging. In commodities, crude oil futures traded lower as the US administration planned meetings with oil companies to discuss boosting Venezuelan production.

Gold and silver prices climbed amid safe-haven demand following geopolitical tensions, with rupee weakness providing additional support to domestic precious metal prices.

The Indian equity markets delivered a strong performance in the latest trading session, with the Nifty 50 climbing to a fresh all-time high of 26,340 before closing at 26,328.55, marking a gain of 182 points or 0.70%. The BSE Sensex advanced 573 points or 0.67% to finish at 85,762, as a broad-based rally took hold across sectors driven by strong corporate updates and positive earnings expectations.

Market Performance and Technical Outlook

The latest session's performance builds on the index's positive momentum, with market breadth turning decisively favorable. Currently, 73% of Nifty 50 stocks are trading above their 50 EMA, representing a sharp improvement from 52% observed earlier and indicating strengthening momentum across large-cap stocks.

According to Bajaj Broking Research, "A strong bullish candle on the daily chart has pushed the index to a fresh high of 26,340, signalling scope for further upside into uncharted territory." The brokerage noted that the benchmark's consistent trading above its key moving averages confirms the strength of its ongoing uptrend.

Analyst Outlook and Trading Strategy

Market experts remain constructive on the near-term outlook, with specific resistance and support levels identified for upcoming sessions. As long as Nifty sustains above the 26,000 mark, the near to short-term outlook remains bullish with a buy-on-dips approach favoring bulls.

"Expectations around upcoming Q3 results and supportive policy measures in the Union Budget have helped lift overall sentiment. A key factor has been improved participation in the broader market, particularly selective buying in mid-cap stocks," said Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services.

Banking Sector Performance

The Bank Nifty has maintained bullish momentum, reaching a fresh high of 60,203.75, driven by sustained strength in PSU banks. According to Amol Athawale, VP Technical Research at Kotak Securities, "For Bank Nifty, the short-term trend is positive, with 59,800 and 59,500 acting as key support zones, while 60,500-60,700 could act as crucial resistance areas for the bulls."

Market Activity and Sectoral Performance

Trading activity remained robust across segments, with several stocks witnessing significant interest from market participants. The session saw 185 stocks hitting 52-week highs, including major names like Maruti Suzuki and M&M, while market breadth remained strongly positive with 2,711 advances against 1,524 declines.

Sectoral analysis shows PSU Bank, Infrastructure, Metal, IT, Nifty Bank, and Financial Services indices remaining in the leading quadrant, with financial and energy stocks particularly driving the latest rally.

Forward Outlook

Khemka expects the positivity to continue into the following week, supported by several companies announcing their pre-quarterly business updates. The optimism around upcoming corporate earnings and strong domestic participation has lifted overall investor sentiment, with analysts maintaining a constructive view on the market's trajectory as attention turns to Q3 earnings season.