The Nifty 50 has scaled fresh lifetime highs around the 26,300 zone, supported by expectations of an earnings revival, easing valuations versus 2024 peaks, and optimism around global and domestic rate-cut cycles. The Sensex is also trading close to its own record levels, reflecting broad strength in large-cap pockets such as banks, autos and industrials. Valuations have cooled from the frothy 23–25x forward P/E band seen about a year ago to a more reasonable low-22x range, even as earnings visibility for FY25–26 has improved with stronger domestic demand and benign inflation trends. This combination of healthy earnings traction and only moderate valuations suggests the current move is more of an earnings-led breakout than a purely liquidity-driven melt-up. In the near term, traders should track 26,100–26,000 as the key support cluster for Nifty, while 26,350–26,500 remains the immediate resistance band where supply can emerge. Dips toward support zones can be used to selectively accumulate quality large caps in banking, capital goods and autos, while avoiding leverage and chasing extended momentum in overheated small-cap pockets.

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