Sensex crosses 85,000 for 1st time, Nifty hits 26,000: What's next for investors?

While Sensex and Nifty closed below record highs amid volatility, analysts remain cautiously optimistic, noting that Indian equities have defied global uncertainty to post strong gains this year.

In Short

• Sensex crosses 85,000, Nifty hits 26,000 amid bullish momentum
• Fed’s rate cut boosts Indian equities despite global uncertainty
• Market consolidation expected, focus should be on quality stock selection

Benchmark stock market indices hit fresh milestones on Tuesday as the S&P BSE Sensex crossed the 85,000 mark and the Nifty50 briefly touched 26,000, driven by a strong bullish momentum.

While the indices closed below record highs amid volatility, analysts remain cautiously optimistic, noting that Indian equities have defied global uncertainty to post strong gains this year.

Vishnu Kant Upadhyay, AVP, Research and Advisory at Master Capital Services Ltd, said, “The Sensex has breached the critical psychological level of 85,000, with Nifty approaching 26,000.”

He attributed this upward trajectory to the Fed’s 50-basis-point rate cut and the government's stable political leadership. The rate cut, which brought US rates to a range of 4.75%-5.00%, provided a global boost to risk assets, benefiting the Indian markets.

“Despite elevated valuations, the Indian market remains attractive, supported by potential increased foreign inflows and robust monthly Systematic Investment Plan (SIP) contributions,” he added.

Upadhyay added that the market seems to be in a "one step back, two steps forward" phase, consistently trading above key moving averages like the 21-day Exponential Moving Average (EMA), which provides frequent buying opportunities.

Looking ahead, Upadhyay projects, “We anticipate the Sensex to reach the 100,000 mark by the first half of next year,” advising investors to adopt a "SIP on DIP" strategy to benefit from market corrections.

While the outlook appears bullish, Pravesh Gour, Senior Technical Analyst at Swastika Investmart Ltd., urges caution.

“The 1 lakh mark for Sensex seems within reach by Diwali 2025, but markets are cyclical. It’s important to avoid overextending positions as high valuations present both opportunities and risks,” Gour said,

He said investors should remain grounded in their return expectations and maintain a balanced approach.

Ajit Mishra, SVP, Research at Religare Broking Ltd., offered a more measured perspective: “Markets traded in a subdued manner, with Nifty briefly testing the 26,000 mark. Sector-wise, metals, energy, and IT showed decent gains, while FMCG and financials saw profit booking.”

Mishra believes that the market will enter a consolidation phase but maintains a positive outlook, driven by rotational buying in heavyweight stocks. “Focus on stock selection and use dips to accumulate quality stocks,” he added, pointing to the Nifty’s strong support zone around 25,600-25,800.

As the domestic markets continue to scale new heights, experts stress the importance of a balanced approach. While the overall sentiment remains positive, the market's cyclical nature calls for caution, particularly as consolidation could follow this rally. Analysts recommend that investors stay vigilant, capitalizing on market dips while maintaining realistic return expectations.

Sectoral rotation, according to Osho Krishan, Senior Analyst - Technical & Derivatives at Angel One Ltd., will play a crucial role in driving outperformance. "It's essential to monitor momentum closely," Krishan said, adding that favorable global developments could further support market growth.

Ultimately, while optimism abounds, the key for investors is to navigate the market with prudence—adopting a strategy that balances opportunity with careful risk management.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)