NIFTY next week, Deal of the week, Market Outlook

NIFTY Update

NIFTY extended its winning streak for the third straight week, this time backed by robust trading volumes signaling strong market participation. The index finally broke past the 25,650 mark, reclaiming a key level last seen in June, and reinforcing the ongoing bullish momentum.

NIFTY closed the week on a strong note above the 25,700 mark, delivering a solid 1.7% gain. However, the index is now approaching the +2 SD level of its YTD-VWAP a zone that typically signals over-extension. The PCR stands around 0.8, reflecting healthy sentiment and pointing toward continued bullish momentum. That said, notable call writing at the 25,800 strike aligning with the +2 SD level could limit further upside in the near term. On the downside, 25,500 appears to be a reliable support level, though a pullback seems unlikely in the upcoming festive week given heightened retail participation around Diwali. For traders, a bull call spread or a bull condor setup might be the more prudent approach in this environment.

Deal of the week 

The past week in the deals markets remained largely subdued, with limited activity apart from some rotation within Goldman’s portfolios. However, one notable development was BNP Paribas’ purchase of MTAR Technologies (NSE: MTARTECH) near its recent highs a move that stands out given the stock’s sharp rally since mid-year.

MTAR Overview - The company develops and manufactures components and equipment for the defense, aerospace, nuclear and clean energy sectors. 

Back in July 2025, Motilal Oswal had initiated coverage with a Buy rating and a target price of ₹1,900, when MTAR was trading around ₹1,536. Since then, the stock has surged approximately 48%, recently crossing the ₹2,250 mark. Despite the strong run-up, the continued institutional accumulation suggests sustained conviction in MTAR’s growth outlook.

From a shareholding standpoint, the trend has been clearly institutional:

• FII holdings rose from 7.57% to 9.20% QoQ.
• DII holdings increased from 23.52% to 24.81%.
• Retail participation declined from 33.29% to 30.51%, indicating retail profit-booking while institutions continue to build exposure.

This shift reflects growing confidence from both domestic and global funds, possibly driven by MTAR’s improving order book visibility in aerospace, clean energy, and defense manufacturing. The company’s FY24 results also supported this sentiment — with revenue growth of 28% YoY, EBITDA margins expanding by ~120 bps, and PAT growth of over 30%.

At current levels, the stock trades around 45x FY25E EPS, which looks elevated on an absolute basis but remains justified if MTAR sustains its 25–30% earnings growth trajectory. With increasing institutional interest and sector tailwinds in precision engineering and clean energy, the stock could continue to attract attention — albeit with near-term consolidation likely after such a steep rally.

Market Outlook 

With Diwali around the corner, next week is expected to see higher retail participation and buoyant sentiment across domestic markets.

From a sectoral standpoint, BankNifty looks poised to extend its upward rally, supported by ICICI Bank’s strong quarterly performance and broad strength within the financial space. Technically, the index could revisit its all-time highs and push toward the 59,500 level, which coincides with the +2 SD of its YTD VWAP; a zone that may act as near-term resistance.

Meanwhile, the IT sector continues to display steady growth momentum. If the Nifty IT index sustains above 36,000, it could set the stage for a move toward the next resistance around 37,000, backed by stable demand from U.S. clients and improved margin guidance from leading players.

The metals space has remained firm, supported by safe-haven flows and steady central bank buying. Gold and silver have delivered strong year-to-date gains with gold up about 65% and silver nearly 80% though analysts warn of a possible short-term over-extension after such a steep rally. In India, the trajectory of the rupee and U.S. dollar strength will be key drivers for the next leg of movement.

Bitcoin continues to show resilience, trading near $116,000–117,000 amid expectations of global rate cuts and renewed institutional interest. However, regulatory concerns remain a key overhang, with the Financial Stability Board (FSB) recently highlighting “significant gaps” in global crypto oversight suggesting near-term volatility may stay elevated.

Sentiment Summary:

The overall market bias remains moderately bullish ahead of the festive week. Institutional flows continue to support the uptrend, though valuations appear stretched in select sectors. Key supports to monitor are around 57,000–57,500 for Bank Nifty and 35,000 for Nifty IT. Precious metals may consolidate after sharp gains, while Bitcoin remains in a watch-and-act phase offering upside potential but with heightened regulatory risk.