Nifty, Sensex outlook: Five factors shaping the next move

Sensex and Nifty advanced for a second successive session on Friday, October 16, with IT shares extending their winning streak to four sessions and buying in auto, metal and public-sector bank stocks adding support. Bank results released over the weekend now join oil prices, foreign investment flows and the rupee as the main developments investors will assess.

Economic Times Markets reported the gains and the five-factor outlook in its October 18 account. Its technical assessment places Nifty’s support at 22,750–22,800 and suggests the recovery could continue if the index stays above 22,750. These are conditional market views, not assurances of further gains.

On the upside, the report identifies 23,400–23,450 as the immediate resistance range. A decisive break above it could open a move towards 23,650, where it places the index’s 100-day exponential moving average.

Bank earnings put credit growth and margins in focus

HDFC Bank, ICICI Bank and Axis Bank announced their quarterly results on Saturday, according to the report. Investors will examine lending growth, deposit mobilisation, margins, asset quality and management commentary to judge the strength of credit demand and banking-sector earnings.

HDFC Bank reported net profit of ₹19,510 crore for the second quarter of FY27, up 4.6% from ₹18,641 crore a year earlier. For the quarter ended September 30, 2026, net interest income—the difference between interest earned and interest paid—rose 9.7% to ₹34,620 crore from ₹31,550 crore.

Those figures make the balance between income growth and profitability a concrete point of scrutiny as investors assess the bank results.

Oil prices threaten to complicate the recovery

The report said crude reached $110 on Friday for the first time since May. It linked the rise to reported Iranian attacks in the Strait of Hormuz, missile launches by Houthi militants towards Saudi Arabia and Ukraine’s stated intention to resume attacks on Russian refineries. These developments and their connection to the price move are the outlet’s account; the cited price was not identified as a specific crude benchmark.

JPMorgan analysts, as cited in the report, described the conflict’s future course as difficult to model. Their assessment was that several economic thresholds they had initially expected the US administration to avoid had already been crossed seven months into the conflict, without a clear exit strategy.

For India, which relies heavily on imported crude, sustained high oil prices can raise the import bill and add pressure on inflation and the currency. The duration of the price rise therefore matters alongside its immediate impact on market sentiment.

IT shares face a technical test after a strong week

TCS, Tech Mahindra, Infosys and Wipro were among the IT stocks highlighted in the report, with gains across the cited shares reaching as much as 17% during the week. The IT index rose 12%, a move the report associated with stronger-than-expected earnings and a sharp decline in AI-linked shares.

Sudeep Shah of SBI Securities identified 32,000–32,200 as the immediate resistance range for Nifty IT. He said a sustained break above that zone could allow the rebound to continue.

Shah also pointed to strong relative strength and momentum in the index’s Relative Rotation Graph positioning. His daily-chart assessment suggested the index was close to breaking a pattern of successively lower highs and lower lows; it did not establish that such a break had already occurred.

Foreign selling slows, but the weekly trend remains negative

Foreign institutional investors remained net sellers for a ninth consecutive week, although weekly outflows fell to ₹8,991 crore from ₹30,294 crore the previous week, according to Bajaj Broking figures cited in the report. Friday brought a reversal, with foreign investors making net purchases of ₹1,166 crore.

Domestic institutional investors were net buyers for a ninth straight week, purchasing a net ₹7,813 crore, despite selling a net ₹3,661 crore on Friday. Month-to-date domestic net purchases of ₹48,168 crore were close to foreign net sales of ₹48,769 crore.

Pabitro Mukherjee of Bajaj Broking interpreted the slowdown in foreign outflows as a possible sign of stabilising sentiment, while warning that expensive crude remained a risk. He identified Brent prices, US-Iran developments and second-quarter FY27 earnings as key indicators to follow.

Rupee gains offer relief, with durability still uncertain

The rupee strengthened for a fifth session and gained 2% over the week, its strongest weekly rise in seven months, according to the report. It closed at ₹94.96 per US dollar, up 0.1% on the day, after the previous week’s decline had taken it near its record low of ₹96.96.

The report attributed the rebound to currency-stabilisation measures but did not identify those measures. Analysts cited in the account cautioned that a lasting recovery would require the underlying pressures on the rupee to ease.

The market levels and brokerage assessments above are reported views, not personalised investment advice.