In a holiday-shortened week, the equity markets witnessed a notable uptick, buoyed by supportive cues. Despite a subdued start on Tuesday, both benchmark indices, the Nifty and the Sensex, rebounded strongly in the following sessions, inching closer to record highs. The Nifty settled at 22,326.90, while the Sensex closed at 73,651.35 levels, reflecting the positive sentiment prevailing in the market.

The rally was not limited to the benchmark indices alone, as a majority of key sectoral indices also moved higher, indicating broad-based participation in the market. The broader indices witnessed a recovery as well, with gains ranging from 0.9 per cent to 1.3 per cent.

“Looking ahead, market participants anticipate volatility to persist in the coming week, particularly with the scheduled Monetary Policy Committee's (MPC) policy meet. Global cues, particularly from the US markets, where resilience is notably observed, will continue to influence sentiments,” said Ajit Mishra, SVP at Religare Broking.

While the overall tone is expected to remain positive, market momentum will hinge on the alignment of the Nifty and the banking index. Analysts eye the levels of 22,550-22,700 in the Nifty, with support levels at 21,850-22,050, Mishra said.

Amidst these developments, analysts reiterate their preference for index majors and large midcaps, suggesting investors focus on themes and sectors exhibiting relatively higher strength. The coming week is set to be eventful, with market participants closely monitoring domestic and global developments to gauge the market's direction in the near term, he added.