September rally boosts Indian markets above 3%; chart trends show renewed momentum

Indian markets are back in action as the NIFTY50 and SENSEX have rallied over 3.5% in September after a muted August performance. The rally can be attributed to recent GST reforms and a probable breakthrough in the tariff situation. The rally is also looking to be broad-based, with NIFTY midcap 100 and smallcap 100 rallying over 6% in the same period.

However, the indices continue to post sluggish and muted performance on an annual basis, underperforming every other global market.

Market experts and investors now project renewed momentum in Indian markets as multiple positive triggers continue to boost investor confidence. From the GST reforms, a potential Federal Reserve rate, and a reasonable valuation cut could materialise into increased inflows by foreign investors back into Indian markets.

Apart from fundamental factors, here is how benchmark and broader indices are placed on Technical charts.

NIFTY50

On the weekly charts, NIFTY50 is on the verge of forming a cup-and-handle candlestick pattern, indicating a breakout from the current long-term consolidation. According to the experts, the breakout could confirm with a weekly close above 25,600 levels on the NIFTY50.

SENSEX

Similar to NIFTY50, SENSEX is also forming a cup & handle candlestick pattern on weekly charts. Experts believe that the breakout would be confirmed if the index closes above the 84,200 levels on a weekly basis.

NIFTY midcap 100

This broader market index on the chart indicates a double bottom candlestick pattern, which indicates a reversal to a bullish trend. On daily charts, we also witnessed a positive crossover of the 21 EMA crossing the 50 EMA, indicating further sustained momentum.

NIFTY smallcap 100

The small-cap index is on the verge of posting a positive crossover of 21 EMA crossing 50 EMA from below, indicating sustained bullish momentum in the index. The index has been highly underperforming the benchmark and currently trades nearly 6% lower than its record high levels last touched in December 2024.