Mumbai, India – October 24, 2025 – The Indian equity markets are showcasing robust bullish momentum heading into Friday, October 24, 2025, propelled by a confluence of strong Q2 FY26 corporate earnings, optimistic projections surrounding India-US trade negotiations, and supportive global cues. The overall bullish market momentum in the Indian equity markets has sustained its upward trajectory for weeks, indicating a healthy risk-on appetite among investors, even as some sectors approach overbought conditions.
The Nifty and Bank Nifty indices continue to exhibit strength, with the latter reaching fresh all-time highs this week. Analysts suggest that while overbought conditions exist, the momentum could persist, with immediate resistance for the Nifty seen around the 26,000-26,100 levels. A decisive move above these marks could further invigorate the uptrend, attracting renewed buying interest in the Indian equity markets. For the Bank Nifty, immediate resistance is eyed around 59,000, with crucial support zones identified between 57,500 and 56,500.
Key Drivers for Indian Equity Markets: Trade Pacts and Earnings Momentum
A significant catalyst for the positive sentiment in the Indian equity markets is the advanced stage of negotiations for a potential India-US trade pact. Reports indicate that both New Delhi and Washington are close to finalising a long-pending agreement, which could lead to a reduction in US tariffs on Indian imports. Such a development is anticipated to bolster investor confidence, particularly for export-oriented sectors like pharmaceuticals, IT services, electronics, and textiles. Progress on these trade discussions, coupled with easing of US 10-year Treasury yields, is expected to encourage capital inflows into emerging markets like India, further boosting the Indian stock market.
The ongoing Q2 FY26 earnings season is also a key driver for the Indian equity markets. Heavyweights such as Reliance Industries, HDFC Bank, and ICICI Bank are among the major corporations announcing their results, setting the tone for the broader market. So far, corporate earnings have largely met expectations, providing a constructive backdrop for market sentiment. Companies like Dr. Reddy’s Laboratories are projected to show moderate year-on-year growth, driven by domestic performance and international acquisitions within the pharmaceuticals sector.
Sectoral Insights and Stock Recommendations for Indian Equity Markets
Several sectors are trending positively and are expected to offer opportunities within the Indian equity markets. The Information Technology (IT) sector continues its strong performance, fueled by global demand for digital transformation, AI, and cloud computing, highlighting strong IT sector growth. Companies like TCS and Infosys are seen as key players.
The Renewable Energy sector is also poised for significant growth, aligning with India’s sustainability initiatives. Sterling and Wilson Renewable Energy Ltd has received a Buy rating with a considerable upside potential, showcasing the promise of renewable energy stocks.
Pharmaceuticals and Healthcare remain robust due to increasing healthcare awareness, demand for innovation, and export potential. Cipla, in partnership with Eli Lilly, is set to distribute a new drug for type 2 diabetes and weight management in India, a development that has drawn attention to the pharmaceuticals sector.
Other promising sectors within the Indian equity markets include Infrastructure and Banking and Financial Services (including FinTech), reflecting strong banking and financial services outlook. Stocks that have recently crossed their 200-day moving averages, indicating positive technical momentum, include K.P.R. Mill, Zensar Technologies, GAIL (India), Angel One, and Power Grid Corporation of India, among others. Additionally, Vodafone Idea, Info Edge (India), and Canara HSBC Life Insurance Company have shown bullish signals.
Market Outlook and Emerging Themes for Indian Equity Markets
While the overall equity market outlook remains constructive for the Indian equity markets, analysts advise caution due to stretched valuations in some segments and the potential for profit-booking. The US economic outlook suggests moderate GDP growth for 2025, though inflation remains above the Federal Reserve’s target. Consumer sentiment in the US has shown signs of pessimism. The International Monetary Fund (IMF) has warned of a potential “sharp correction” in US markets due to concentration risk in mega-cap tech firms and complacency among investors.
However, for India, the domestic economic fundamentals, coupled with policy momentum and easing monetary prospects, paint a positive picture for the Indian equity markets. Despite potential headwinds from volatile US trade policies, India’s large domestic market offers insulation. The focus remains on stock selection and diversification within trending sectors of the Indian stock market. As investors navigate these market dynamics, a keen eye on upcoming earnings reports and the evolving geopolitical and trade landscapes will be crucial for identifying profitable stories within the Indian equity markets.
The anticipation of favourable trade agreements and a strong domestic earnings season suggests that Indian markets may continue their upward journey, offering opportunities for discerning investors seeking to capitalise on the nation’s growth narrative within the Indian equity markets.
