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Bulls extend gains as rally broadens across sectors; Nifty expected to head towards 25500

ICICIdirect Research 07 Aug 2026 DISCLAIMER

Equity benchmark extended gains over the second consecutive week, brushing off the geopolitical noise to settle the week at 24550, up 0.7%. Broader market outperformed wherein small caps remained in limelight as it reclaimed new highs of 20 months, up 2.5%.
On the sectoral front, we are witnessing rotation as PSU Banks, Defence and Metal regained momentum after couple of months breather while recent outperforming themes like capital market and realty took a breather.
What we expect:
Nifty after reclaiming its 200-day EMA is expected to head towards 25500 in the coming weeks. Our positive bias remains intact till the key support threshold of 23600 is held.
Our constructive bias is further validated by the following observations:
Over the past three decades, there have been 8 occasions where Nifty have remained below its 200 days EMA for at least four months. The subsequent move after reclaiming its 200-day EMA was 12% - 19% over the next 3 to 6 months.
Following the Midcap move, Nifty small cap index also reclaimed its all-time high after 20 Months.

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