The Indian stock market has witnessed a remarkable rally, with the Nifty50 index surging 18% from its March lows. This impressive gain of nearly 4,000 points has brought the index within striking distance of its all-time high, sitting just 150 points below the record closing high set on September 26.

Key Drivers of the Rally

Three heavyweight stocks have been instrumental in fueling this rally:

These three stocks alone contributed significantly to the index's total gains, highlighting their influence on the market's performance.

Sector Performance

Interestingly, this rally occurred without the participation of the IT sector, which has been under pressure. The five major IT stocks now carry a combined weight of just 13% in the index, indicating a shift in sector dynamics.

Foreign Investment Boost

Foreign Portfolio Investors (FPIs) have played a crucial role in this upward trend:

• On October 28, foreign investors purchased $1.2 billion worth of Indian equities, marking the second-biggest single-day purchase of the year.
• Month-to-date FPI inflows reached $2.5 billion, reversing the trend from the September quarter, which saw an outflow of $9.3 billion.

Individual Stock Performances

Recent Developments in the IT Sector

While the IT sector has been lagging in the recent rally, there are signs of continued business activity. For instance, Infosys, one of the major IT stocks that saw a decline, recently announced an extension of its strategic collaboration with Metro Bank, a UK-based independent bank. This partnership aims to transform Metro Bank's finance operations by implementing Workday solutions, potentially positioning Infosys for future growth in the banking sector.

As the Nifty50 approaches its all-time high, investors and analysts are closely watching the market's performance and the potential for other sectors, particularly IT, to contribute to future market movements.

The Nifty50 has reached new 52-week highs as Diwali approaches, with historical Muhurat trading data suggesting a positive outlook for Indian equities. Market strategist Anand James from Geojit Investments sees potential for the Nifty to approach 26,000 levels, supported by a strong 14-day RSI of 69.

Historical Muhurat Trading Performance

Over the past decade, Muhurat trading has shown consistently positive trends:

Pre-Muhurat and Post-Muhurat Trends

Historical patterns indicate that when the pre-Muhurat week is positive, the Nifty tends to perform well:

• Muhurat trading day: Average returns of 0.60%
• Following week: Approximate returns of 2.00%

Sector-wise Outlook

Post-Muhurat trading, different sectors show varying probabilities of performance:

Nifty Bank Momentum

The Nifty Bank index is showing momentum towards the 60,000 target. However, traders should be cautious of potential volatility in the 57,800-58,000 region.

Trading Recommendations

For investors looking at specific stocks, market analysts suggest:

1. KANSAINER

   • Target: 270
   • Stop-loss: 241

2. RADICO

   • Target: 3,240
   • Stop-loss: 3,014

As the Indian market heads into the festive season, these trends and recommendations provide valuable insights for investors. However, it's crucial to conduct thorough research and consider individual risk tolerance before making investment decisions.