India’s equity market may face a short-term hiccup after hitting fresh milestones on Thursday. Fuelled by optimism over potential rate cuts from the US Federal Reserve and Reserve Bank of India, the benchmark indices -- NSE Nifty50 and BSE Sensex -- hit a fresh all-time high during intraday deals on Thursday after a gap of 14 months.
The Nifty 50 opened the Thursday session at 26,261.25 and touched a record high of 26,310.45 in early trade. The 30-share index Sensex opened the session at 85,745.05 and hit an all-time high of 86,055.86 during the session. However, the benchmarks recorded profit booking during the second half of the session and settled with minor gains. The Nifty50 closed at 26,219.85, up by 14.55 points while the Sensex rose by 110.87 points to settle at 85,720.38.
Market experts expect limited short-term upside due to elevated valuations and risks of foreign institutional investors (FIIs) resuming net selling. “There is fundamental support to the rally from prospects of improved earnings and sustained domestic fund flows. But there is no room for a sustained rally since valuations are not cheap…Also, there is a possibility of FIIs again turning sellers at higher levels. Therefore, investors have to be cautious,” said V K Vijayakumar, Chief Investment Strategist, Geojit Investments.
Vijayakumar added that investors should not chase smallcaps which are overvalued and safety is in largecaps and midcaps with growth potential. He said the rally has fundamental support from prospects of improving earnings in Q3 and Q4 followed by around 15% earnings growth in FY2027.
After buying shares worth Rs 4,778 crore on Wednesday, foreign institutional investors (FIIs) sold shares worth Rs 1,996 crore on Thursday. For 2025, the total FII sell figure through exchanges stands at Rs 209,444 crores (as on November 21). Market participants will now keenly watch the upcoming GDP print, along with key events such as the US-India deal and the RBI policy meeting.
Ajit Mishra, SVP, Research, Religare Broking, said that while frontline indices are scaling record highs, the broader market — especially small-caps — remains subdued. A recovery in this segment, along with supportive global cues and steady domestic sentiment, could drive the next leg of the rally, he added.
Amruta Shinde, Technical & Derivative Analyst at Choice Equity Broking, said that Nifty 50 hitting a new high after 14 months is an important sign that market sentiment has turned strongly positive. However, Shinde added that while the recent rise has been sharp, short-term corrections can occur as the market consolidates new levels, and any pullback toward support zones is likely to attract buyers as long as the index stays above its breakout point.
“The Nifty index had been consolidating near its previous peak of 26277 for over a year, holding key support levels of 26000-25800. This breakout above 26277 confirms that the long-term uptrend is intact and gaining strength. It also reflects renewed institutional buying, supported by better macro conditions, stable earnings, and participation from multiple sectors,” stated Shinde.
Amandeep Singh Uberoi, Founder and CIO of Creencia Consulting, said that after a year of muted returns and time correction, the new all-time high in Nifty and Sensex shows the strength and resilience in India's growth story. “Banks have been at the forefront of this move and policy changes such as GST 2.0 will be duly reflected in the earnings to follow. Exciting times ahead for our markets,” added Uberoi.