F&O Talk | Nifty ends for a week, closes above 24,800 while pullback rally steam wins. What awaits? Sudeep Shah weighs inside

Markets organized a recovery in the midst of volatility and were closed near the highlights of the week, stimulated by broad purchasing after the recent correction. The first sessions remained muted, but the sentiment saw a sharp change after the announcement of the MPC policy. Consequently, both benchmark -Indices achieved a profit of almost 1%, with the Nifty ending in 24,894.25 and the Sesex at 81,207.17.

The RBI policy announcement emerged as the most important highlight of the week. The Monetary Policy Committee enforced the REP rate at 5.5% for the second consecutive meeting, while the FY26 GDP -Growth -growing was upgraded to 6.8% and the inflation for views in cutting. On the domestic macro -economic front, data presented a mixed image – industrial output growth moderated to 4% in August, and the production PMI production used to 57.7 in September. However, a bright spot was the 9.1% on annual rise from GST collections to RS 1.89 Lakh Crore in September, which is a reflection of persistent consumer momentum.

With this, analyst Sudeep ShahVice -president and head of technical and derivatives research SBI effectsInteraction with ET markets with regard to the prospects for Nifty and Bank Nifty, as well as an index strategy for the coming week. The following are the edited fragments from his chat:

The markets sighed relieved after the MPC meeting on Wednesday. What do the markets look like now?

The Benchmark index Nifty closed the truncated week on a positive note and closed at the level of 24,894 with a win of 0.97%, supported by a rebound in the late week. On the Daily Chart it was a record session count Candlestick pattern and then started to witness a withdrawal rally. The recovery in the last two trade sessions has been added to optimism, so that the pullback rally is continued.

An important catalyst for this step was the Bank Nifty, which yielded a strong performance, which rose more than 2% and formed a considerable bullish candle on the weekly graph. The bank in the bank of the bank sounded to a highest point of 30 sessions and emphasized the relative strength of the banking sector. Frontliniebank shares such as Kotak Mahindra Bank, Axis Bank and HDFC Bank in particular made an important contribution to this rally, floating sectoral leadership and the trust of investors. Moreover, the Nifty IT index, which had undergone a corrective phase, showed signs of stabilization. The delay in the decline helped to support the wider market, help the pullback and reduce the downward pressure.

For the current rebound to get a meaningful traction, a decisive follow -up movement in the coming week is essential. Persistent purchasing interest in important sectors, especially in bank and large-cap-names, are crucial to confirm the strength of this recovery and to prevent another phase of consolidation or profit booking.

Speaking of levels, the zone of 25,050-25.100 will act as a critical obstacle for Nifty, because it is placed 61.8% Fibonacci retracement level of the recent decrease in that region. A sustainable movement above 25,100 can activate a sharp withdrawal rally, which may extend to the 25,400 Mark, where further resistance can arise. On the other hand, the support zone of 24,600-24,550 remains vital. An infringement below this reach could invite renewed sales pressure and dampen the recovery momentum.

What is the image of Nifty at the moment?

Bank Nifty has delivered an excellent performance this week and surpassed decisively on the wider market indexes. The bank -benchmark rose by more than 2%and closes the week above 55,500 marks. This marks its highest weekly closure since the last week of July 2025, which underlines a strong revival of bank shares. On the weekly graph, the index has formed a large bullish candle, which is a reflection of a persistent purchase interest and a positive sentiment in the sector.

The most important factors of this rally were Kotak Mahindra Bank, Axis Bank and HDFC Bank, which significantly contributed to the upward momentum of the index. Their strength helped to eliminate the overall tone of the bank space.

From a relatively strength perspective, the Bank Nifty to Nifty Ratio graph has reached a high and signaling of clear and consistent outperformance of bank shares over the frontlinic indices. Technically, the index has recovered its most important advanced averages, which strengthens the bullish undertone. Moreover, the daily RSI is about to cross the 60 level and remains in an increasing process – a sign of strengthening the momentum.

Given the current map structure, the index will probably continue its northern journey and test the level of 56,200, followed by 57,000 in the short term. While, on the disadvantage, the 20-day EMA zone of 55,000-54,900 will act as important support for the index.

What is the opinion about FII statistics at the moment? They don’t seem to support now. Do you think diis can support the markets for a long time?

FIIs have been net sellers in recent months. In September 2025, FIIs withdrew over RS. 35301 Crores from Indian shares, which continue their exclusion of several months. In July and August, FIIs dumped more than RS 94,570 Crore in Indian shares, put under pressure through stretched valuations, weak income and global uncertainties.

On the other hand, Diis is aggressively introduced. In the last three months, the net inflow of the diis was 2,21,111 crore. Despite Fii outflows, domestic flows have anchored the markets.

Historically, diis often bought aggressively when FIIs sell, as a stabilizer. Their currents are more stable because they are powered by domestic savings, sips and policy support. With more retail participation and domestic institutional capital, the depth and resilience of the market improve.

That said, as an external headwind such as interest differences, US dollar strength, intensifying trade tensions, the domestic flows may not be sufficient to compensate for them. In the short term, diis can help support and stabilize the markets, especially in a volatile external environment where FIIs stay on their guard.

If FIIs remain absent, markets can still make inches, but the pace and the width can be limited. But for a sustainable, long -term upward trend, a reversal in Fii streams or renewed foreign trust is probably necessary.

On which sectors do you concentrate now?

Technically, Nifty Metal, Nifty PSU Bank, Nifty Private Banks, Nifty CPSE, Nifty PSE and Nifty Financial Services will probably continue in the short term.

While on the other hand Nifty IT, handy consumers sustainable, handy FMCG, Nifty Pharma, Nifty Healthcare and Nifty Realty are probably underperforming in the short term.

Are there shares within those sectors?

Technically, Kotak Bank, Bharat Electronics, Bhel, Canara Bank, Panjab National Bank, JSW Steel, Tata Steel, National Aluminum, Shyam Metalics and Minda Corp are good.

((Indemnification: Recommendations, suggestions, views and opinions of the experts are their own. These do not represent the views of economic times)