After remaining range-bound for nearly four months, the Nifty 50 index is inching towards its September 2024 high, buoyed by optimism over a potential India–US trade deal, improved corporate earnings for the July–September 2025 quarter, and on the back of a policy rate cut by the US Federal Reserve late on Wednesday.
The trade deal hopes gathered steam on Wednesday after US President Donald Trump said during the APEC CEO Summit in South Korea, “I’m doing a trade deal with India, and I have great respect and love for Prime Minister (Narendra) Modi. We have a great relationship.”
The benchmark Nifty 50 closed at 26,053 on 29 October, just 224 points short of its 27 September 2024 peak of 26,277. Market momentum has already been building on festive demand, GST-led triggers, and the transmission of previous rate cuts. Now, analysts say, a breakthrough in trade talks could push the index beyond its previous high.
“Heading into the November expiry, we expect the index to trade in a broad range of 25,600-26,300, with an upward bias, and among one of the catalysts driving the rally would be positivity around the India-US trade deal,” IIFL Securities said in a report dated 28 October.
Shrikant Chouhan, head of equity research at Kotak Securities, predicted a sustained upward trajectory for the Nifty 50 once it crosses the September peak, although the movement would be gradual and sustainable rather than euphoric. And if information technology (IT) stocks begin to participate—possibly after the Fed rate cut—the Nifty could even extend gains toward the 27,000 mark, he said.
Chouhan backs his projection on the back of the US Federal Reserve‘s rate cut, bond yields easing further and the rupee remaining stable. The US Fed cut its benchmark overnight lending rate by 25 basis points.
“Also, foreign investors have slowed their selling and corporate earnings have largely met expectations, supported by reforms such as GST and tax benefits.”
Notably, after continuously being net sellers since July, FIIs (foreign institutional investors) have bought $2,385 million in secondary markets in October, according to data from NSDL.
George Thomas, fund manager at Quantum Mutual Fund said that the move could sustain as earnings continue to improve.
“Key sectors such as banking and IT are showing signs of stability. In banking, most credit costs and margin pressures are behind, while credit growth is reviving. The IT sector, after a phase of subdued spending, could see renewed traction, especially if the India–US trade deal materialises, as it would boost corporate sentiment and project activity,” Thomas said.
The earnings growth for Nifty 50 has also fared better than the previous quarter. The revenue growth for Nifty 50 companies—those who have reported results—is at 3.24% year-on-year (y-o-y) in the second quarter of fiscal year 2026 (Q2FY26). In Q1FY26, earnings growth had slowed by 1.64% y-o-y.
According to Alok Singh, chief investment officer at Bank of India MF, if the trade deal materialises, it would be positive for markets over the long term as it could boost exports, spur private investment and attract manufacturing activity to India.
“Higher exports to the US would improve capacity utilisation and encourage new investments, addressing the current weakness in private capex. Additionally, the deal could push US companies to de-risk from China and set up manufacturing bases in India, making the ‘China plus one’ strategy more achievable,” Singh added.
