Nifty Outlook for October 26: 22,200 key support as crude oil tops $117; Fed policy, earnings in focus

Nifty extended its losing streak to four sessions on Friday, shedding 87 points to settle at 22,600. The index opened 55 points higher but quickly reversed course, falling more than 400 points from its intraday high during the first half of the session.

Buying in the second half, along with gains of more than 80 points during the Closing Auction Session (CAS), helped the benchmark recover over 200 points from the day’s low.

For the week, Nifty declined 2.36%, while selling pressure was more pronounced in the broader market. The Nifty Midcap 100 fell 5.6% over the week, while the Nifty Smallcap 100 plunged more than 7%, marking its steepest weekly decline since February 2025.

All sectoral indices ended lower on Friday, with Metal, Consumer Durables and Realty recording the steepest losses. Within the Nifty 50, Eternal, Apollo Hospitals and ONGC were among the few gainers, while Shriram Finance, Adani Enterprises and JSW Steel led the declines.

The rupee weakened for a second consecutive session, falling 12 paise to close at 94.94 against the US dollar, pressured by rising crude oil prices and a stronger dollar.

Market outlook: Crude oil, geopolitics in focus

Indian equities are likely to remain volatile, with elevated crude oil prices and escalating geopolitical tensions weighing on sentiment. Crude rose above $114 a barrel, gaining 1.1% and touching a five-month high amid concerns over potential supply disruptions in the Middle East and risks to Saudi oil infrastructure.

Escalating US-Iran tensions, stalled diplomatic talks and reports of possible renewed US-Israeli strikes on Iranian nuclear and military assets have heightened concerns about a wider conflict. Hostilities around the Strait of Hormuz, a critical route for global oil shipments, could further disrupt supplies, push energy prices higher and intensify inflationary pressures.

Investors will also monitor developments in global monetary policy. The US Federal Reserve’s policy meeting on October 27-28 and the Bank of Japan’s interest rate decision will be key events, alongside US initial jobless claims and GDP data.

On the domestic front, the Q2 earnings season will remain in focus, with Paytm, Tata Consumer Products, Larsen & Toubro, Maruti Suzuki, Hindustan Unilever, Adani Ports, Trent, Sun Pharmaceutical Industries and Bharat Electronics among the companies scheduled to report results next week.

Jio Platforms’ record IPO closed for subscription on Friday, with healthy participation across investor categories. The company’s scheduled listing on October 28 will be an important event to watch for sentiment in the primary market.

Nifty technical outlook

Nandish Shah of HDFC Securities said the broader bearish structure remains intact, with Nifty trading below key moving averages despite recovering from its intraday low. The index has slipped below its 200-week moving average on the weekly chart and its 20-day moving average on the daily chart, indicating a deterioration in the technical setup.

Shah identified 22,372, Friday’s low, as the immediate support level. A decisive break below this mark could drag the index towards 22,200. On the upside, resistance is seen at 22,800 and 23,175.

LKP Securities’ Vatsal Bhuva also identified 22,200 as a crucial support level, warning that a decisive breach could trigger another round of selling. Immediate support is placed at 22,500, while resistance is seen in the 22,700-22,800 range.

Bhuva advised traders to remain cautious, keep positions light and trade around key technical levels. He also flagged Brent crude as an important variable, noting that a sustained rise above $110 a barrel could further weigh on market sentiment.

Nagaraj Shetti of HDFC Securities said Nifty’s negative chart pattern and inability to sustain its opening gains point to a weak near-term outlook. He sees the next support zone at 22,300-22,200, while any recovery could face strong resistance around 22,800.

Bank Nifty outlook

Bank Nifty underperformed the broader market on Friday, with intraday volatility spanning more than 1,000 points. Although the banking index recovered from its session low, it ended the day 638 points lower.

Sudeep Shah of SBI Securities said the 53,700-53,800 zone is an important support area for Bank Nifty. A sustained break below this range could invite further selling pressure. On the upside, the 54,900-55,000 zone is expected to act as a key resistance area.

Overall, the direction of crude oil prices, developments in the Middle East, global central bank decisions, foreign investor flows and corporate earnings are likely to determine whether Indian equities can stabilise or extend their recent losses in the coming sessions.