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Nifty defies global weakness; eyes breakout above 26300

ICICIdirect Research 21 Nov 2025 DISCLAIMER

Defying the global trend, Nifty extended gains over second consecutive week and settled at 26075, up 0.6%. Meanwhile, broader market underperformed as smallcap lost 2%. Sectorally, IT continued to bounce back coupled with BFSI and auto, meanwhile realty, metal underperformed.

Key Highlight:
Over past two-week US and European markets  corrected more than 5%, while Nikkie has corrected more than 8%. In the meantime, defying the global trend, Nifty has rallied 3.5% over past 2 weeks underscoring relative outperformance.

What to expect:
A decisive close and a follow through strength above All Time high of ~26300 would open the door for revised target of 26800 in coming month.
Sustainability above 26300 would revive market sentiment resulting into broad based participation. Hence, focus should be on accumulating quality stocks backed by strong Q2 earnings, especially from broader market space as Nifty small cap index has approached key support threshold of 200 days EMA
Strong support for the Nifty is placed at 25,600 as it is 61.8% retracement of Sept-Oct rally (24588-26104) coincided with 50 days EMA
 
Following observations makes us reiterate our positive stance:
The current leg of up move is led by Bank Nifty and followed by Midcap index which has hit a fresh all-time high this week, while Nifty is shying away 0.5% from its peak. Meanwhile, Small cap index is still trading below 10% from its all-time high. We expect, catch up activity to gradually pan out in small cap space in coming weeks
Strong Q2 earnings and improving macro indicators bodes well for durability of ongoing up move.  
 
Key Monitorable:
US and India Tarde Deal: Tracking nearing closure news of the US and India trade deal has kept Indian market upbeat. The favourable outcome could accelerate the positive momentum in the market and pave the way for return of FII’s in the Indian markets.
GDP data:  US & India
Brent Crude Oil: dropped ~3% during the week. Further cool off in Brent crude oil bodes well for domestic market
Indian Rupee: Indian Rupee has depreciated and recorded new low of 89.5. Further decline in rupee could temper market sentiment

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