Stock Market Outlook: Sensex, Nifty Bullish Breakout Signals More Upside Ahead; Bank Nifty Eyes 58,000

Indian equity markets are expected to continue their bullish momentum on October 17, 2025, following a robust performance on the previous trading day. Analysts across brokerages anticipate further gains, buoyed by strong institutional inflows, solid Q2 corporate earnings, falling crude prices and global cues that continue to favor risk-on sentiment.

Stock Market Outlook For 17 September 2025

On October 16, the benchmark BSE Sensex surged 862.23 points or 1.04% to close at 83,467.66, while the Nifty 50 climbed 261.75 points or 1.03%, ending the session at 25,585.30. Notably, the Nifty breached the psychologically significant 25,600 mark intraday for the first time since June 27, before witnessing mild profit booking in the final hour.

According to Bajaj Broking Research, "Domestic equity markets extended their upward trajectory for the second consecutive session... supported by sustained buying across sectors and robust investor sentiment." The broader market also remained strong, with Nifty Midcap100 and Smallcap100 indices gaining 0.5% and 0.2%, respectively.

Sectoral Trends: Realty, FMCG, Auto Stocks in Focus Today

The rally was broad-based with positive breadth across sectors. The Nifty Realty and FMCG indices led the gains, each rising 2%, bolstered by better-than-expected results from Nestlé. The Auto sector saw a 1.3% rise, driven by festive demand optimism and recent GST cuts on small cars, two-wheelers, and tractors.

Motilal Oswal's Siddhartha Khemka said, "The rally was broad-based, supported by strong Q2 results and improving sentiment... Investor confidence was further lifted by progress on India-U.S. trade talks, with discussions in Washington expected to focus on energy cooperation."

While most sectors advanced, IT Hardware lagged with a 0.8% drop, weighed down by concerns surrounding U.S.-China trade tensions.

Institutional Flows and Macro Sentiment

Foreign Institutional Investors (FIIs) turned marginal buyers, investing Rs 68.6 crore, while Domestic Institutional Investors (DIIs) made significant purchases worth Rs 4,650 crore, reflecting renewed confidence and ample liquidity. The macro backdrop remained favorable, supported by declining crude oil prices, stable U.S. yields, and hopes of a Fed rate cut.

The announcement of a Rs 40,000-45,000 crore defence capex boost and discussions around a potential PSU bank merger also contributed to the market's optimistic tone.

Nifty Prediction Today: Technical Indicators for October 17, 2025

Technical indicators continue to show strength on the Nifty 50. Bajaj Broking Research notes that the index formed a strong bullish candle with a higher high and higher low, signaling ongoing momentum. The breakout above a falling supply line connecting September 2024 and June 2025 highs is a key bullish development.

"On the smaller time frame, Nifty has generated a breakout above a three-month symmetrical triangular consolidation pattern... highlighting positive bias, and any dips should be used as a buying opportunity," the brokerage added.

Looking ahead, analysts expect Nifty to retest the June 2025 high of 25,670. A breakout above this level could open the door toward 25,800 in the short term. On the downside, the 25350-25450 zone will now act as strong support.

Bank Nifty Outlook For 17 September 2025: All Eyes on 58,000

The Bank Nifty index, which outperformed the broader market in the recent uptrend, closed firmly above the 57,000 mark, forming a bullish candle with a gap-up base. The sector remains in focus ahead of key Q2FY26 earnings announcements from private banks on Saturday.

"Bank Nifty continues to outperform... and is likely to test our target of 58,000, being the 161.8% external retracement of the previous up move," Bajaj Broking stated.

Momentum indicators like RSI (14) at 66 support the bullish outlook. The Thursday gap area of 56,700 is now expected to act as immediate support, with dips considered buying opportunities.

With global crude prices cooling, potential U.S. Fed easing, and diplomatic progress in India-U.S. trade talks, the equity markets are well-positioned to sustain upward momentum in the near term.

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