The Indian equity market finds itself at a pivotal juncture this week, with the Nifty hovering just over 100 points below its all-time high, even as the rupee slips to historic lows, raising concerns among foreign investors. On Friday, the rupee dropped 0.9% to 89.49 against the U.S. dollar, its steepest decline since May, driven by heavy outflows, uncertainty over a potential US-India trade deal, and signs of the RBI stepping back from defending key levels. A partial rebound on Monday, supported by likely RBI intervention, saw the currency gain 0.3% to 89.1625, though volatility remains elevated.
Foreign investors sold ₹1,700 crore in equities on Friday, reflecting the negative impact of a weaker rupee on dollar returns. Despite this, domestic indices showed resilience: the Sensex rose 241 points to 85,473, and the Nifty added 75 points to 26,143, nearing its September record of 26,277. Analysts see potential for a fresh high in November, supported by strong earnings growth and technical strength, but caution about resistance near 26,250–26,300 and possible sharp swings. Large-caps and quality midcaps remain preferred, while small-caps appear overvalued.
