NIFTY Outlook for Diwali 2025 — Will the Bull Run Light Up Again?
Introduction: Festive Sentiment Meets Market Reality:
As the country gears up for Diwali — lights, sweets, and bonuses — the market too seems to be in a festive mood.
But the real question this time isn’t whether the market will rise; it’s how much steam is left in this incredible rally that’s been running for almost two years.
The NIFTY 50 is now hovering near 24,700, just a short step away from the psychological 25,000 mark. The Sensex too has crossed 82,000, and even cautious investors are starting to wonder if the market has become unstoppable.
Yet, under all this excitement lies a simple truth — the rally has started becoming selective. Not everything is going up together anymore.
🧭 Where We Stand — Strong Economy, Selective Market:
India’s growth story remains powerful on paper and in numbers:
- GDP growth: Estimated at 7.1% for FY26 (among the highest globally).
- Inflation: Moderating near 4.9%, giving RBI breathing room.
- Corporate profits: 13–15% growth YoY in Q2FY26.
- SIP inflows: Record ₹20,500 crore in September — retail investors aren’t backing off.
However, if you zoom into the market internals, you’ll see a shift.
Large caps like HDFC Bank, ICICI Bank, L&T, NTPC, BEL, and HAL are seeing steady accumulation.
But on the flip side, several midcap and smallcap counters — especially in textiles, chemicals, and microfinance — have corrected 15–25% quietly in the past few weeks.
That’s not panic selling — it’s smart money rotation.
Technical Landscape — NIFTY’s Key Battle Zones
| Indicator | Levels | Market Reading |
| Current NIFTY | 24,650–24,800 | Consolidating near all-time highs |
| Support Zone | 23,600–23,800 | Strong base (previous breakout area) |
| Resistance Zone | 25,000–25,200 | Psychological barrier + option wall |
| 20-DMA | Around 24,200 | Short-term trend support |
| RSI | 58–60 | Neutral – room for upside |
From a price action perspective, the market is showing textbook consolidation — a sign that big players are neither exiting nor aggressively buying.
Volumes are higher on down days, but closing recoveries show strong buy-on-dip behavior.
In short — the trend remains bullish, though momentum has cooled.
⚙️ Sectoral Deep Dive — Where the Money Is Flowing
🏦 Banking & Financials: Silent Strength Continues:
PSU banks are the quiet heroes this season.
- SBI and Canara Bank both posted over 20% YoY profit growth in Q2.
- Credit growth remains above 14%, NPAs below 1%.
Private players like HDFC Bank are consolidating, while ICICI Bank and Axis Bank show strong loan book expansion.
Banking continues to be the anchor sector of the current bull market.
🏗 Capital Goods & Infrastructure: The Engine of Growth:
Companies like L&T, Siemens, Thermax, and ABB are riding the government’s ₹11-lakh-crore infrastructure push.
Order books are swelling, capacity utilization is at a multi-year high, and margins are improving.
The NIFTY Infra Index is up nearly 18% YTD, and still not showing exhaustion.
Traders see dips here as solid opportunities to re-enter.
🚗 Auto Sector: Festive Demand in Top Gear:
This Diwali, the auto sector is firing on all cylinders — literally.
- Maruti Suzuki reported a record 2.3 lakh deliveries in October.
- Tata Motors continues to gain EV market share.
- Two-wheeler demand is improving thanks to rural revival and falling fuel prices.
The NIFTY Auto Index is at lifetime highs, backed by fundamentals, not hype.
⚡ Energy & PSU Power: The Surprise Performer:
This year’s unexpected outperformer has been the power sector — especially NTPC, PowerGrid, NHPC, and SJVN.
Strong demand growth (over 9% YoY) and rising renewable capacity are fueling the rally.
NTPC’s diversification into green hydrogen and solar assets has also attracted institutional buying.
💻 IT & Tech: Bottoming Out, Slowly
After a tough year, the IT index seems to be stabilizing.
Infosys, TCS, and LTIMindtree have guided cautiously optimistic on FY26 revenue.
The rupee staying near ₹83 is cushioning earnings.
Still, this sector will likely remain a stock-picker’s playground, not a broad rally.
🌍 Global Check — A Friendly Backdrop:
The US Fed has paused rate hikes and hinted at one cut by early 2026.
Crude oil prices are holding below $90/barrel, and the Dollar Index (DXY) has softened slightly — both positive for emerging markets like India.
Foreign institutional investors (FIIs) have turned net buyers again — around ₹5,000 crore in October — while domestic institutions (DIIs) continue steady inflows.
This dual liquidity cushion is keeping the market resilient despite global uncertainties.
💬 FinPlace View — The Market Is Healthy, Not Hysterical
This is not a bubble. It’s an earnings-backed bull run — though the pace is slowing, which is actually a good thing.
Our view:
- NIFTY could touch 25,500 by early 2026 if earnings growth stays above 12%.
- Short-term volatility will continue, especially in midcaps.
- Stick with strong names in banking, capital goods, power, and auto.
Traders should watch 24,200 (short-term support) and 25,000 (key resistance).
A Diwali breakout above 25,000 with volume would confirm continuation of the uptrend.
🔦 Example Watchlist (for study purpose):
| Sector | Stock | Reason to Track |
| Banking | SBI, ICICI Bank | Consistent earnings, strong credit growth |
| Auto | Tata Motors, Maruti | Festive volume surge, EV growth |
| Capital Goods | L&T, Siemens | High order inflow, clean balance sheet |
| Power | NTPC, NHPC | Green energy expansion |
| PSU Infra | IRCON, RVNL | Policy-backed order books |
(Note: Educational analysis only, not investment advice.)
🏁 Closing Thought
“Markets don’t rise because of festivals — they rise because of fundamentals. Diwali just reminds us to look at them with fresh light.”
The festive season is bringing optimism, liquidity, and momentum — but discipline will decide who actually builds wealth.
This is not the time to chase random smallcaps or social-media tips.
It’s time to stay with quality and ride the structural story India is writing for the world.
✍️ Written by: Samrat Das
Founder & Lead Trainer, FinPlace Global Services
Trainer | Analyst | Market Observer
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