Markets likely to remain range-bound

Spooked by hawkish tone of US Fed, mixed Q2 corporate earnings, renewed FII selling and fresh China trade on the back of US-China trade talks; markets ended their four-week winning streak, closing marginally lower on a weak note.

For the week, Sensex index shed 273.17 points or 0.32 per cent to end at 83,938.71 and the Nifty declined 155.75 points or 0.60 per cent to close at 25,722.10. However, in the broader market, the BSE Mid-cap Index added 1 percent and the BSE Small-cap index rose 0.7 per cent.

After a brief buying spell, FIIs sold equities worth Rs 2,102 crore. DIIs continued their buying for 28th week, with equity purchases worth Rs 18,804.26 crore. The Indian rupee ended near record low at 88.77 per dollar. During the week, the Indian rupee traded in the range of 87.85-88.78.

The absence of any concrete progress in the US-India trade deal discussions further weighed on sentiment, maintaining a cautious tone for the currency. The Goods and Services Tax (GST) collections witnessed a 4.6 per cent year-on-year (YoY) growth to Rs1.96 trillion in October 2025, despite the tax cuts rolled out by the central government’s GST Council in September.

Despite massive rate cuts effective from September 22, a slight increase in domestic GST collection is encouraging and shows that demand is steadily increasing. Consistent increase in GST refunds (domestic as well as exports) shows confidence of tax administration that GST collections would show positive trend in future as well.

Next month’s data would have the full impact of GST cuts and would be keenly awaited. The political battle ground will be steaming with the Bihar election’s first phase commencing on Nov. 6.

Bihar will see an electoral contest between the NDA and the Mahagathbandhan. NDA includes the BJP, JD(U), Lok Janshakti Party (Ram Vilas), Hindustani Awam Morcha (Secular) and Rashtriya Lok Morcha. Outcome of Bihar elections will trigger a knee jerk reaction in markets. Markets are expected to remain range-bound in the near term, with domestic earnings announcements and global macro developments guiding overall sentiment. The upcoming holiday-shortened week is expected to remain eventful, with multiple key data releases and major corporate earnings lined up.

IPO Corner: IPO Market is poised for potential record-breaking November with Rs 76,000 Crore worth of issues. Major companies preparing for market debuts include Lenskart, Groww, ICICI Prudential AMC, Pine Labs, Cleanmax Enviro Energy, and Juniper Green Energy.

The surge is attributed to a rebounding secondary market, with the Sensex and Nifty gaining over 5 per cent in October. The diverse range of sectors represented includes technology, renewables, healthcare, and consumer goods, reflecting broad-based economic activity and investor interest.

Some observers are calling the present exuberance as the “dumbest in the history of IPO markets,” a sentiment triggered by the recent pre-IPO activity surrounding Lenskart. They are calling it a systemic pattern of retail investor manipulation and flawed post-IPO rationalizations, questioning both the process and the pricing strategies of India’s new-age IPOs.

While anchor investment is typically seen as a mark of institutional confidence, observers are calling it a facade to attract retail participation at inflated valuations. First, the IPO is launched at what deems to be an unjustifiably high valuation. Then, soon after listing, the stock collapses in the secondary market. The stock will fall… 50 per cent, 60 per cent, 80 per cent as seen earlier in cases such as CarTrade, Nykaa, Zomato and Paytm.

The core issue lies in what happens after the price collapse. Investors, anchored to the original listing price, interpret the dip as a buying opportunity, rather than reassessing the fundamental value of the company at the new lower price.

This flawed logic, continues to trap more investors. Market observers feel that there is urgent need of regulatory scrutiny of IPO valuations in India, particularly in the tech and consumer-facing sectors, where companies are often backed by high-profile venture capitalists and private equity funds.

It’s very difficult to predict when the next recession or stock market crash will come, so many of the best investors don’t even try. Instead, look for good companies with the strength to make it through the occasional challenging economic environment.

FUTURES & OPTIONS / SECTOR WATCH

Settlement week witnessed sharp swings in the derivative segment. The undertone remained largely positive and volatile during the initial sessions; however, selling pressure in the latter half of the week wiped out early gains.

Bank Nifty outperformed the broader indices, closing the week in positive territory, while the Nifty declined by around a quarter of a percent on the weekly chart. However, on a monthly basis, the Nifty recorded its second-highest gain of the year.

On the sectoral front, Nifty PSU Bank index rose 4.7 per cent, Nifty Oil & Gas index gained 3 per cent, Nifty Metal index rose 2.5 per cent, Nifty Energy index rose 1.8 per cent. On the other hand, Nifty Healthcare, Auto, Private Bank indices down 1 per cent each. In the options segment, the highest Call open interest for Nifty was observed at the 26,000 and 25,900 strike levels, whereas notable Put open interest was concentrated at the 25,800 and 25,700 strikes.

For the Bank Nifty, significant Call open interest was seen at the 58,000 strike, with substantial Put open interest at the 58,000 strike. Implied volatility (IV) for Nifty’s Call options settled at 10.84 per cent, while Put options concluded at 11.89 per cent. The India VIX, a key indicator of market volatility, concluded the week at 12.06 per cent.

The Put-Call Ratio Open Interest (PCR OI) stood at 1.14 for the week. Nifty rollovers declined to 75.79 per cent, compared to 82.60 per cent in the previous month and below the three-month average of 80.64 per cent, indicating a loss of momentum heading into the November series.

Bank Nifty rollovers stood slightly higher at 79.57 per cent, versus 78.45 per cent last month, and were broadly in line with the three-month average of 79.11 per cent, reflecting an adequate carryover of positions. Support now lies near 25,600, coinciding with the 20-DEMA, and further down at 25,400, marked by trendline support.

On the upside, resistance is seen around 26,100, and a sustained move beyond this level could open the door for a new record high. Stocks looking good are Aurobindo Pharma, BEL, Canara Bank, Patanjali, Suzlon, SAIL, Sun Pharma and UPL. Stocks looking weak are BSE, Exide Inds, Kotak Bank, ICICI Bank, LIC Hsg, HDFC Life and SRF.

STOCK PICKS

Poly Medicure Ltd. (POLYMED)

The company is a leading player in the organized medical disposable devices market with strong brand positioning due to high quality products used in infusion therapy, blood management, surgery, dialysis, and other segments.

The company manufactures and supplies, in India and internationally, a diverse portfolio of medical devices in the product verticals of infusion therapy, oncology, anaesthesia and respiratory care, urology, gastroenterology, vascular access, surgery and wound drainage, dialysis and renal care, diagnostics, transfusion system, veterinary medical devices and others.

The company is the largest exporter of medical devices from India, 70 per cent of the sales are from exports to the highly regulated developed markets like EU, LATAM, SE Asia etc., which is a testament to POLYMED’s superior quality products. It is among the top three IV Cannula manufacturers in the world and the first indigenous dialyzer manufacturer. The company currently operates 12 manufacturing facilities across India, China, Egypt, and Italy.

To take advantage of growth prospects in the medical devices sector, the company plans to invest in enhancing its physical and operational infrastructure and diversify its product portfolio.

It is set to open three new manufacturing facilities dedicated to medical device production in Jaipur (Rajasthan), Palwal (Haryana) and Haridwar (Uttarakhand). Buy on declines for medium term target of Rs3,500.