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Market will watch out for RBI credit policy and Sept Auto Sales.

Gaurav Bora

Governments recent reform will improve demand and revive economy that lifted investors sentiments; Nifty (-0.90%), Sensex (-1.10%). Mid Cap & Small Cap index gained +0.2% and +0.3% respectively in this week. FIIs bought equities worth 2037 crore while DIIs bought equities worth 800 crore. Bank, FMCG and Capital Goods gained 3.5-4% whereas Auto, Pharma, IT, Metal and Realty were down 1-2.5%. Stock market will remain shut on October 2 for Mahatma Gandhi Jayanti. Now market will focus on RBI policy decision scheduled on October 4, which could give further direction and decide mood of the market. Indian Railway Catering and Tourism Corporation (IRCTC) IPO will hit for subscription during September 30 to October 3 with a price band of Rs 315-320 per share, our view for this IPO is subscribe we may see min 25-30% listing gains. To meet governments divestment target Bharat 22 ETF FFO will hit market on October 3 to October 4 with 3% discount, our view for this FFO is subscribe for allotment gains.

The September sales of automobile companies will be released on October 1, auto sales are expected to remain weak as discounts offered by auto companies in the last few months has failed to revive expected demand but after the corporate tax rate cut many companies have started offering more discounts this can impact on auto sales. RBI’s credit policy will be scheduled on October 4, we can expect another 25 bps cut in the fourth bi-monthly monetary policy as inflation target within its target of 4% so MPC members will focus on growth. Trade war between US and China which has been going on for over one-and-half-year now, Trump administration may limit US portfolio investments into China and delisting of Chinese companies from US stock exchanges to limit US investment in Chinese companies. Trump’s recent comments at United Nations, saying the trade deal between US and China could happen sooner than people think likely trade negotiations can happen somewhere in mid-October and global markets will closely watch that. Oil prices fell 3.7% during the week and closed to $61.91/bbl on weak global demand. Because of FIIs inflow Indian rupee continued to appreciate in last week and close at 70.50 against the US dollar. 

Monday market may open on flat note as SGX Nifty at 11,556 (-29). Nifty closed above 11,500 and there could be a consolidation in coming week after a rally in last three consecutive weeks. On downside markets will take support of its 150DMA 11,391. India VIX up by 4.64% from 15.40 to 16.11 levels. On the options front, maximum Call open interest (OI) is at 11,600 followed by 11,700 strike while maximum Put OI is at 11,500 followed by 11,400 strike. Current option data shows a broad trading range between 11,400 to 11,700 levels on the Nifty. On lower side Nifty’s crucial support at 11,400 levels, on the higher side immediate hurdle is at 11,600.

Data shows we may see upside above 11,600 in coming week. So traders are advised to take fresh buy position we may see nifty rally to 11,700, 11,800.

FOR INVESTORS THIS IS BUYING OPPORTUNITY ACCOUMLATE QUALITY STOCKS ON EVERY DIP, AS THIS VOLATILITY IS BECAUSE OF MAJOR EVENT BUT FUNDAMENTALS ARE VERY MUCH INTACT. VOLATILITY IS FRIEND OF INVESTOR.

Top Gainers of the Week:

BPCL (+16.33%)

Bajaj Finserv (+11.14%)

IOC (+9.81%)

Bajaj Finance (+9.59%)

ICICI Bank (+7.59%)

Top Losers of the Week:

Yes Bank (-12.16%)

Tata Motors (-10.02%)

Zee Entertainment (-9.24%)

Indiabulls Housing (-8.94%)

SBI (-6.79%)

Gaurav Bora 
(Market Expert)

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