A weak day for Indian markets which was largely weighed down by muted global cues, but the pullback in the last one hour helped Nifty close above 11,000 levels on a closing basis was a bullish sign.
The market pulled back slightly towards the close of the trade given the fact that there was strong support near 11,000 (second highest Put OI).
Final Tally -- the S&P BSE Sensex dropped 261 points while Nifty50 closed 72 points lower to 11,003.
The sudden jump in crude prices developed concern over higher inflation and ability of RBI to cut interest rate in the future. Crude oil price which rose above $70/bbl have pulled back slightly and is now trading around $65/bbl.
Goldman Sachs said an outage of more than six weeks due to drone attacks on Saudi Arabian oil facilities over the weekend could cause Brent prices to rally above $75 a barrel, although the magnitude of the impact was uncertain at this point.
Drone strikes on Saudi’s oil processing facilities have added to the trade war related uncertainties and deteriorated market condition globally.
There is another commodity which hogged the limelight and that was Gold. Gold Futures rallied by more than Rs 500 and was trading above Rs 38000 per 10 gm.
On the micro front, India's August wholesale price index (WPI) remained flat sequentially, but eased on a year-on-year basis, official data showed on Monday.
All eyes are on US Federal Reserve policy meeting and RBI meeting in October. It will be important to hear the commentary from the RBI amid a rise in crude oil prices.
Logging its first fall in eight sessions, the Indian rupee on Monday plunged by 68 paise to 71.60 against the US dollar amid concerns over soaring crude prices following drone attacks on Saudi Arabia's oil facilities.
On the institutional front, FPIs were net sellers in Indian markets for Rs 751 cr while the DIIs were net buyers to the tune of Rs 308 cr, provisional data showed.
The mutual fund industry managed to garner Rs 8,231 crore through systematic investment plans (SIPs) in August, a rise of 7.5 percent from the year-ago period, despite volatility in the equity market.
With this, total SIP contribution in the first five months of the current fiscal rose to Rs 41,098 crore as compared to Rs 36,760 crore in April-August 2018, as per the Association of Mutual Funds in India (AMFI).
SIP continued to be the preferred route for retail investors to invest in a mutual fund as it helps them reduce market timing risk, the industry body noted.
As per the latest data, SIP contribution in August stood at Rs 8,231 crore, which was 7.5 percent higher than Rs 7,658 crore clocked in the same month last year.
Nifty formed a Doji kind of pattern on the daily charts on Monday.
The formation of a Doji pattern after a bullish candle indicates there is some indecisiveness among the bulls as well as the bears.
If the Nifty manages to sustain above 10,945 in the next session, then it can attempt a breakout above 11,081 levels.
A bullish confirmation will come once the Nifty closes above 11,141, which could facilitate a slightly bigger rally.
Three levels: 10945, 10968, 11052, 11100
Max Call: 11200, 11500
Max Put OI: 10800, 11000
Stocks in news:
Drug firm Dr. Reddy's Laboratories on Monday said it has launched over-the-counter Lansoprazole capsules used for the treatment of frequent heartburn in the US market.
Tata Power on September 16 said its subsidiary Tata Power Renewable Energy Ltd (TPREL) has commissioned 150 megawatt (MW) solar capacity project at Pokhran in Rajasthan.
Infosys unveiled the Infosys Live Enterprise Suite, a set of platforms, solutions and digital services that help incumbent enterprises to accelerate their digital innovation journey.
We spoke to HDFC Securities Ltd and here’s what they have to recommend:
Britannia Industries Ltd: Buy| LTP: Rs 2,715|Target: Rs 2,869|Stop-Loss Rs 2,630| Upside 6%
GNFC: Buy| LTP: Rs 198| Target: Rs 218| Stop-Loss: Rs 186| Upside 10%
Maithan Alloys: Buy| LTP: Rs 505| Target: Rs 566| Stop-Loss: Rs 468|Upside 12%
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