Stock market news: India’s stock market indices declined on Friday as profit-taking occurred in financial and IT shares, although the market still recorded a third consecutive week of increases following a US interest rate reduction, local tax cuts, and positive sentiment surrounding trade discussions with Washington.

The Nifty 50 dropped by 0.38% to 25,327.05, while the Sensex decreased by 0.47% to 82,626.23 on Friday.

On Wednesday, the US Federal Reserve announced a 25 basis point cut in interest rates, a move that was widely expected.

Lower interest rates in the US enhance the attractiveness of emerging markets like India to foreign portfolio investors, as Treasury yields and the dollar generally fall in this environment.

Investors were also buoyed by advancements in trade negotiations between India and the US as officials resumed talks this week.

Dharmesh Shah from ICICI Securities believes Nifty 50 to head towards 25,800 in upcoming month. Shah recommends two stocks to buy in the coming week. Investors should consult experts before making decisions.

Market Outlook by Dharmesh Shah, Vice President, ICICI Securities

Equity benchmark endured its winning streak over third consecutive week underpinned by strong global cues tracking Fed rate cut. Nifty 50 settled the week at 25,327, up ~1%. Broader market outperformed as Midcap gained 1.5% while small cap rose 2.8%. Sectorally, PSU Banks, Realty, Defence remained in limelight. The weekly price action formed a bull candle carrying higher high- low, indicating continuation of the upward momentum as the breakout from contracting triangle helped index to approach near our target of 25,500.

Going ahead, we reiterate our positive stance and expect Nifty 50 to head towards 25,800 in upcoming month. The across sector participation on the back of GST reforms helped to improve market breadth while maintaining higher peak and trough intact, highlighting inherent strength.

Over past three weeks index has rallied >1000 points without any breather. Thereby, possibility of temporary breather at higher level cannot be ruled out which will make market healthy and pave the way towards 25,800 in coming month wherein strong support is placed at 24,700. After announcement of growth friendly GST reforms, now all eyes are on the progression of tariff negations. Any announcement on scrapping of additional 25% tariff or lowering reciprocal tariff rates would fuel further momentum in the market. Consequently, focus will shift towards export-oriented Textile, Capital Goods and Pharma stocks.

Mirroring the Dow Jones move, Russell index (US Small cap index) clocked a fresh All Time High after 2021, indicating broadening of global rally. On the domestic broader market front, in a bull market scenario, average decline in Midcap and Smallcap indices have been 27% and 29%, respectively. Buying in such scenario has been fruitful with >50% returns in subsequent 9-12 months.

In the month of April, after 23% and 27% correction in Midcap and smallcap, indices witnessed a sharp rebound and made a higher base in the vicinity of 52-week EMA. Currently, Midcap index is shying away 3% from its All Time High while small cap index is 6% away from All Time High. Hence, focus should be on accumulating quality stocks on dip.

Our positive stance is further validated by following observations:

a) Index heavy weight: Revived traction in BFSI, IT, Auto (cumulative >50% weightage) would drive Nifty 50 higher.

b) Sentiment indicator at lows: Historically, rare occurrence of India Vix closing below 11 has eventually garnered double digit returns in subsequent 12 months.

c) Market breadth: Constant improvement in market breadth highlights inherent strength. Currently, 65% stocks are trading above 50 days SMA while 70% stocks are trading above 200 days SMA compared to one month back reading of 41% and 58%, respectively.

Stocks To Buy This Week – Dharmesh Shah

Dharmesh Shah of ICICI Securities recommends buying State Bank of India (SBI), Larsen & Toubro Ltd (L&T).

Buy L&T shares in the range of ₹3,570-3,680. He has L&T share price target of ₹3,998 with a stop loss of ₹3,344.

Buy SBI shares in the range of ₹830-863. He has SBI share price target of ₹950 with a stop loss of ₹787.

Disclaimer: The Research Analyst or his relatives or I-Sec do not have actual/beneficial ownership of 1% or more securities of the subject company, at the end of 19/09/2025 or have no other financial interest and do not have any material conflict of interest.

The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.