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| Edited By: Yogesh Vinod Mehta |Source: DNA |Updated: Oct 09, 2017, 07:25 AM IST
The Diwali month started with fireworks as Bulls made a dramatic comeback on D-Street.
Nifty closed at 9980, gaining 1.95%, or 191 points, week on week, on the back of strong push and support by positive global markets and managed to regain the loss of the earlier week. The mid-cap and small-cap indices gained 2.3% and 3.75%, respectively, outperforming the Nifty.
The week saw a smart rally and all sectoral indices ended in the green. As mentioned last week, the strong push was backed by the energy sector, which gained the most 5% in which upward gas-price revision announcement helped Gail gain 9% and RIL 7.3%. Oil marketing companies like HPCL gained 5%, IOC and BPCL gained 4% each as the government announced cut in excise duty on petrol and diesel by Rs 2/litre.
Metal sector shined again on rising base metal prices on London Metal exchange as well as strong second-quarter sales by Tata Steel, which gained 6.3%, Hindalco and Vedanta gained between 4% and 4.5%. Pharma sector followed the doctor’s prescription well and gained 3.3%, led by Aurobindo which gained 8% and Sun Pharma gained 6%.
Foreign institutional investors still continued selling in equities, with the sale of worth Rs 3,022 crore while domestic institutional investors bought worth Rs 3,896 crore in the week.
Last week the US markets hit the record high level, Hang Seng touched the highest level since 2007, the Monetary Policy Committee (MPC) decided to keep the policy rates on hold despite the slowdown in the economy due to goods and services tax (GST) and rising inflation worries. Also, the projection for gross value added growth revised downwards from 7.3% to 6.7%.
Over the weekend, the GST Council announced tax rate cut on 27 items and 12 services to eliminate technical glitches on returns filing for SMEs, refunds and deferred Reverse Charges Mechanism till March 31, 2018. Two-wheeler and four-wheeler automobile companies have seen September sales growth of 10-15% in the festive season. Companies like TVS and Hero crossed new milestones in their monthly sales numbers.
SBI Life debut listing got a tepid response while Prataap Snacks listed with a premium of 35%. Godrej Agrovet IPO was subscribed 95 times. MAS Financial IPO will close tomorrow, Indian Energy Exchange IPO raising Rs 1,000 crore will open for subscription from today and GIC Re IPO raising Rs 11,400 crore will open for subscription on Wednesday.
US and Japan markets are shut today. Key global events to watch out for in this week are Federal Open Market Committee (FOMC) meeting minutes on Wednesday, BoE meeting and European Central Bank president Mario Draghi’s speech on Thursday. India September Trade balance on Tuesday, August industrial production and consumer inflation will be announced on Thursday. Q2’18 earnings season will kick-start from this week. TCS, IndusInd Bank, South Bank, Cyient, Reliance, MCX, DMart, GRUH Finance will announce their quarterly results.
Macro data like IIP and gearing up for the quarterly earnings will set the tone and volatility of the markets. Private banks as well as oil and gas sector will remain in the focus ahead of better result expectation.
On the weekly charts, Nifty is oscillating in a well-defined trading range of 10150-9680 for the last few weeks. Nifty has closed above its crucial resistance level of 9950 and 50-day SMA, major support is at 9880. For the week, upside resistance remains at 10060-10150 levels and on the downside break below 9880 can pull Nifty towards 9780-9680 levels.
The writer is vice president-retail research, Motilal Oswal Securities Ltd
