The combined net institutional flow of ₹23,093.47 crore represents one of the strongest months of institutional support, providing a robust foundation for the market’s upward trajectory into Samvat 2082.

Global Market Cues: Festive Optimism Meets International Support

Wall Street Provides Positive Backdrop

US markets concluded Friday’s session on a positive note, with the Dow Jones gaining 0.52%, S&P 500 rising 0.53%, and Nasdaq advancing 0.52%. The rally was driven by easing US-China trade tensions following diplomatic signals and expectations of Federal Reserve rate cuts at the upcoming October 28-29 policy meeting.​

Asian Markets Show Resilience

Asian markets opened Monday’s session with broad-based strength, breaking a two-week losing streak as improved trade sentiment and stable economic indicators boosted investor confidence. Japan’s Nikkei 225 advanced 0.45%, while Hong Kong’s Hang Seng surged 0.82%, providing positive momentum for Indian markets.​

Commodity and Currency Dynamics

Gold prices extended their bull run to $4,088.50 per ounce, providing support to domestic gold and silver stocks – particularly auspicious given the traditional Diwali practice of purchasing precious metals. The Indian rupee strengthened significantly by 0.85% to 88.02 against the US dollar, marking its best weekly performance in over five months and benefiting import-heavy sectors.​

Technical Analysis: Breakout Setup for Samvat 2082

Nifty 50 Poised for All-Time High Challenge

From a technical perspective, the Nifty 50 has formed a textbook bullish pattern with three consecutive weekly gains, each displaying higher highs and higher lows. The index has decisively broken above the crucial falling trendline connecting major highs from September 2024 and June 2025, confirming a major trend reversal.​

The weekly chart displays a sizable bull candle with strong closing near the week’s high, indicating sustained buying pressure and positioning the index for a potential assault on the all-time high of 26,277.35 achieved in September 2024.​

Key Technical Levels for Diwali Week:

Momentum Indicators Strongly Bullish

The RSI stands at 69 on the daily chart, maintaining an upward trajectory without entering overbought territory, while the MACD remains well above the signal line with expanding histogram bars indicating sustained momentum. The short-term moving averages are trending upward in a bullish alignment, with the index comfortably maintaining distance from these averages, paving the way for further gains.​

Technical analysts project that if Nifty decisively closes above the bearish gap zone of 25,740 left from October 3, 2024, the first target would be 26,000, followed by 26,200 levels representing the 123.6% and 138.2% external retracements of the three-month corrective decline.​

Bank Nifty’s Breakout Confirmation

Bank Nifty’s achievement of an all-time high represents a significant technical milestone. The index has broken out from a symmetrical triangle pattern and is now targeting 58,500 and subsequently 59,000 levels. Analysts at Bajaj Broking note that “the index rallied to a fresh all-time high” and expect it to head toward 58,500-59,000 zones in the coming sessions.​

Derivative Market Analysis: Bulls in Command

Options Data Reflects Strong Bullish Bias

The derivatives market provides compelling evidence of bullish sentiment heading into Diwali. The Nifty Put-Call Ratio (PCR) has improved to 1.18 from 0.98 a week ago, indicating increased confidence among options traders. The Bank Nifty PCR stands even higher at 1.24, reflecting very bullish positioning.​

Open Interest Analysis

Maximum call open interest has shifted upward from 25,500 CE to 26,000 CE strike, indicating that traders expect the index to challenge the 26,000 psychological level in the near term. Heavy call writing is observed at 25,800 levels, suggesting this as the immediate resistance zone for the current week.​

On the put side, maximum open interest remains anchored at 25,000 PE with heavy writing at 25,500 levels, establishing a strong support base. This creates a well-defined trading range of 25,000-26,000 for the Diwali week, with bias toward the upper end.​

Volatility Dynamics

The India VIX jumped 6.99% to 11.63 on Friday, reflecting increased volatility expectations ahead of major earnings and the festive week. However, this remains at historically moderate levels, suggesting that any volatility is likely to be directional rather than chaotic, favoring momentum strategies.​

Earnings Season: Banking Giants Lead Diwali Week

Monday’s Blockbuster Results

The Diwali week kicks off with arguably the most important earnings announcements of Q2FY26, with HDFC Bank, ICICI Bank, and Reliance Industries scheduled to report their quarterly results on October 20. These three heavyweights collectively account for over 25% of the Nifty 50 index weightage, making their results crucial for market direction.​

Market expectations are elevated following strong business updates from both private sector banks during the quarter. HDFC Bank is expected to report steady loan growth with improving margins, while ICICI Bank’s strong retail franchise should drive consistent performance. Reliance Industries’ results will be closely watched for commentary on its new energy business and retail segment performance.​

Earnings Calendar for Diwali Week:

Special Trading Session on October 21

Tuesday, October 21 will witness the traditional Muhurat Trading session from 1:45 PM to 2:45 PM, marking the beginning of Samvat 2082 – the Hindu New Year. This one-hour special session is considered highly auspicious for making investments and is believed to bring prosperity throughout the year.​

The pre-opening session will commence at 1:30 PM, with regular trading from 1:45 PM to 2:45 PM, followed by a modification window until 2:55 PM. Trading will be permitted across all segments including equities, derivatives, currency, and commodities.​

Historical Significance and Returns

Historically, Samvat years have delivered impressive returns for long-term investors. Over the past decade, Samvat periods have shown an average return of approximately 12-15% annually, significantly outperforming most asset classes. The tradition of investing during Muhurat trading is deeply rooted in the belief that transactions made during this auspicious hour attract Goddess Lakshmi’s blessings and ensure financial prosperity.​

Market Strategy for Diwali Week

Buy-on-Dips Remains Optimal Strategy

Technical analysts unanimously recommend a “buy-on-dips” approach for the truncated Diwali week. Vatsal Bhuva of LKP Securities advises, “Given the current technical configuration and optimistic bias, a buy-on-dips approach for the Sensex index, with a stop-loss set at 83,000, is recommended”.​

The recent breakout from the trading range has been confirmed with strong follow-through buying, bolstering bullish sentiment for both short and mid-term horizons. Any pullback toward 25,500-25,350 support zone should be viewed as an accumulation opportunity.​

Sector-Specific Recommendations

Overweight Positions:

• Banking & Financial Services: Strong momentum, earnings visibility, and technical breakout support continued outperformance

• FMCG & Consumer Durables: Festive demand, improving rural consumption, and pricing power

• Real Estate: Interest rate stability expectations and festive season launches

• Select Large-cap IT: Defensive characteristics despite near-term headwinds

Selective Approach:

• Pharmaceuticals: Stock-specific based on US FDA approvals and domestic formulations growth

• Auto: Await festive season sales data; two-wheelers preferred over four-wheelers

• Infrastructure: Government capex push provides long-term visibility

Underweight/Avoid:

• Metals: Global demand concerns and China trade tensions

• Mid-tier IT Services: Margin pressure and weak guidance trends

Risk Factors and Monitoring Points

Despite the overwhelmingly positive setup, several factors warrant vigilance:

1. Geopolitical Tensions: US-China trade relations remain fragile; any escalation could trigger global risk-off

2. Earnings Disappointments: High expectations from banking sector; any miss could trigger profit-booking

3. Global Economic Data: US inflation and employment data due this week could influence Fed policy expectations

4. Valuation Concerns: Nifty trading at 20.5x forward P/E; stretched in certain pockets

5. FII Flow Sustainability: Recent buying needs to continue for sustained rally

Economic Calendar: Key Data Points This Week

Domestic Data Releases:

• Manufacturing PMI data expected to show continued expansion

• Services PMI likely to reflect festive season strength

• Weekly inflation figures due Thursday

Global Events:

• US CPI data for September (Friday) – crucial for Fed policy outlook

• China Q3 GDP and trade data releases

• Fed officials’ speeches on monetary policy path

• European Central Bank policy commentary

Diwali Week Trading Guidelines

For Intraday Traders:

• Focus on index heavyweights and banking stocks

• Avoid over-leveraging given truncated week and earnings volatility

• Book partial profits at resistance levels; trail stop-losses on winners

• Monitor GIFT Nifty and global cues for gap risk management

For Positional Traders:

• Accumulate quality large-caps on any dips toward support zones

• Maintain 25,300 as stop-loss for long positions

• Targets: 25,900-26,000 on Nifty; 58,500-59,000 on Bank Nifty

• Diversify across banking, FMCG, and selective defensives

For Long-term Investors:

• Participate in Muhurat Trading for auspicious portfolio additions

• Focus on quality businesses with strong fundamentals and growth visibility

• SIPs and systematic investments remain optimal strategy

• Rebalance portfolio to reduce overweight positions after recent rally

Conclusion: A Prosperous Diwali Beckons

As we stand at the threshold of Samvat 2082, Indian equity markets present an overwhelmingly positive picture supported by robust domestic institutional flows, improving corporate earnings, stable macroeconomic fundamentals, and constructive technical setup. The three-week festive rally has positioned benchmark indices tantalizingly close to all-time highs, with Bank Nifty already achieving historic milestones.

The gap-up opening indicated by GIFT Nifty at 25,977.50 suggests that Monday’s session could witness the Nifty 50 finally breaking through its 52-week high and embarking on a journey toward the coveted 26,000 psychological level. The timing couldn’t be more auspicious as investors prepare to celebrate Diwali and participate in Tuesday’s Muhurat Trading session.

The market’s resilience in the face of global uncertainties, supported by unprecedented domestic institutional buying of ₹22,780 crore in October, demonstrates the structural strength of India’s equity markets. As we transition from Samvat 2081 to Samvat 2082, the confluence of festive optimism, strong earnings expectations, and favorable technical setup creates a compelling case for continued market strength.

However, investors must remain grounded and disciplined, maintaining appropriate risk management protocols even as euphoria builds. The key is to participate in the rally while being mindful of valuations and potential headwinds from global developments.

🎇 शुभ दीपावली! Wishing You a Luminous Diwali 2025! 🎇

May the divine light of Diwali spread peace, prosperity, happiness, and good health into your life and that of your loved ones. May Goddess Lakshmi bless your portfolios with abundance, and may Samvat 2082 bring unprecedented growth to your investments!

May your trades be profitable, your investments multiply, and your financial goals shine brighter than the brightest diya!

शुभ दीपावली और नव संवत्सर 2082 की हार्दिक शुभकामनाएं!

Disclaimer: This analysis is for informational purposes only and should not be construed as investment advice. Past performance is not indicative of future results. Please consult with your financial advisor before making investment decisions. The auspicious Muhurat timing does not guarantee returns; fundamental and technical analysis should guide investment decisions.

Note: Markets will remain open for regular trading on Monday, October 20, 2025. The official Diwali holiday for exchanges is Tuesday, October 21, with Muhurat Trading from 1:45 PM to 2:45 PM. Markets will remain closed on Wednesday, October 22, for Balipratipada.

Analyst Name: Pradeep Suryavanshi
Bestmate Investment Services Pvt. Ltd.:
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Download full report :- Nifty OL 20-10-2025

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