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In the holiday-shortened week, the domestic equity market will get influenced by corporate earnings rupee movement, and foreign investors flow, analysts said. They said that market volatility may also come into play amid the scheduled monthly derivatives expiry. Trading in stock market will be allowed for only three days this week due to a long-leg of holiday on the occasion of Diwali.
“We are heading into a truncated festival week where bulls have reason to celebrate Diwali on a higher note as the US market witnessed a sharp rebound in Friday’s trading session,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.
The market will continue to have an eye on the direction of global markets, the dollar index, US bond yields, and crude oil prices, Meena added.
“On the domestic front, October month expiry may lead to some volatility whereas Q2 earnings will cause stock-specific movement,” Meena noted.
Ajit Mishra, VP – Research, Religare Broking Ltd said the scheduled monthly derivatives expiry will keep volatility high. Besides, earnings and the performance of global markets will remain on the radar.
Investors would also keep track of the rupee-dollar trend, foreign institutional investors (FIIs) trading activity, and Brent crude oil prices.
“On the earnings front, participants will first react to the results of index majors like Reliance, ICICI Bank, and Kotak Mahindra Bank. Besides, other prominent names like Tata Chemicals, Dr Reddy’s, Maruti, Vedanta and Tata Power will also announce their numbers during the week,” Mishra added.
On Friday, the Indian stock markets ended the week on a higher note on the back of upbeat earnings from India Inc. Both Sensex and Nifty jumped more than 2%.
On 21 October, Sensex closed at 59,307.15 up by 104.25 points or 0.18%, while Nifty 50 edged higher by 12.35 points or 0.07% to end at 17,576.30. Heavyweights like Axis Bank, ICICI Bank, HUL, and Kotak Bank were top performers due to their Q2 results.
On Monday the stock exchanges will conduct a one-hour special muhurat trading session marking the beginning of a new Samvat 2079 — the Hindu calendar year that starts on Diwali.
It is believed that trading during the ‘muhurat’ or auspicious hour brings prosperity and financial growth to the stakeholders.
Trading would take place across various segments like equity, commodity derivatives, currency derivatives, equity futures & options, and securities lending & borrowing (SLB) in the same time slot.
Manish Jeloka, Co-head of Products & Solutions, Sanctum Wealth said that Indian equities have outperformed global markets significantly in Samvat 2078, and the outperformance is expected to continue in Samvat 2079. However, investors need to keep in mind that a slowdown in the global economy due to tightening liquidity conditions could lead to bouts of volatility like that witnessed in Samvat 2078, he added.
“Samvat 2079 is likely to be like Diwali. There will be a celebration along with loud bursting of crackers. Ukraine, US Fed Rate, Oil, Inflation and Zero Covid policy of China will continue to bust,” Nilesh Shah, Group President and MD at Kotak Mahindra Asset Management Company, said.
Banks, capital goods, and manufacturing are likely to outperform the market in Samvat 2079. Also, tech and pharma will provide interesting opportunities on a bottom-up basis in the correction, he added.
The exchanges will remain closed on October 26, on the occasion of Diwali Balipratipada.
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