The optimistic combination of strong real growth, healthier investment trends and a broad-based recovery in demand is expected to keep stocks supported in the near term.VK Vijayakumar, chief investment strategist at Geojit Investments, said the upside surprise came “like a shot in the arm for bulls”, noting the 9.1% growth in manufacturing and 7.3% rise in gross fixed capital formation.
He said the strength in consumption, reflected in a 7.9% increase in spending, could also fuel investment demand. According to him, the print has the potential to stop sales from foreign investors and even bring FIIs back to India at a time when global markets are looking for stable growth engines.
Geojit’s Vinod Nair said GDP growth will help support sentiment at the start of the week, even as investors will keep an eye on a tough macro calendar with PMI data from India and the US, US core PCE inflation and the upcoming RBI policy decision. With domestic growth strong and credit demand improving, he expects the medium-term outlook to remain positive, although short-term volatility around global and central banking events could persist.On the technical front, analysts expect the Nifty to maintain its positive structure. Bajaj Broking said the index continues to trade within a rising channel and could gradually move towards 26,500 if the momentum continues.It identified 26,000 as immediate support, with the 25,800-25,700 band emerging as a crucial near-term zone as it aligns with key moving averages, the bottom of the two-month channel and recent lows. Staying above these levels, the bias remains comfortably positive.
Ajit Mishra, SVP of research at Religare Broking, said the market setup remains constructive over the medium term as expectations for global rate cuts strengthen and India’s domestic growth prospects strengthen. He expects near-term fluctuations as macro data rolls in, but believes investors should maintain a buy-on-dips attitude, especially near key support areas. He also said that large caps remain the safer option in the current environment and traders should continue to monitor stop-losses to protect profits.
Last week, markets extended their winning streak for the third week in a row, hitting new all-time highs. Early profit-taking was followed by a sharp mid-week recovery and steady consolidation. On Friday, the Nifty closed at 26,202.95, up 0.52%, while the Sensex rose 0.56% to 85,706.67.
Driving forces included rising expectations of a US Federal Reserve rate cut in December, improved global sentiment and optimism about progress in Russia-Ukraine negotiations, which helped ease crude concerns. Domestic optimism about growth and sector-specific resilience contributed to the strength, even as export-related concerns kept the upward trend in check.
Overall, Monday is likely to open on a strong note as markets react to the GDP surprise. The week may still see bouts of volatility due to global data and the RBI’s policy stance, but the broader picture remains favorable.
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