A fabulous Wednesday for the bulls as Indian market snapped 6-day losing streak
The S&P BSE Sensex rose by nearly 650 points while the Nifty50 was up nearly 200 points
The final tally on D-Street – the S&P BSE Sensex rose 645 points to 38,177 while the Nifty50 closed 186 points higher at 11,313 on Wednesday.
The index bounced back from 50-DMA placed at 11087. It also reclaimed its crucial long term moving average placed at 200-days EMA at 11,227, and 200-DMA at 11,266.
What led to the rally?
Short covering, Cabinet announcement of DA allowance, and some hopes of a positive outcome from trade talks between the US and China.
In terms of sectors –S&P BSE Telecom index rose 4.9%, followed by the S&P BSE Bankex which gained 3.67%, and the S&P BSE Finance index and Metal index rallied over 2% each.
Banks outperformed as sharp fall in bond yield is indicating further room for rate cuts which will improve liquidity and consumption story.
On the losing front, the S&P BSE IT, and Consumer Durable index closed in the negative.
In terms of stocks which were top gainers in terms of open interest – Muthoot Finance, Siemens, Berger Paints witnessed long buildup while NALCO, and ICICI Pru witnessed short buildup on the charts.
Top Nifty gainers – ICICI Bank (up nearly 5%), followed by Bharti Airtel (up 5.2%), and IndusInd Bank (up 5.4%)
Top Nifty losers: Titan, Hero MotoCorp down 2% each while YES Bank plunged over 5%
Going forward, experts feel that the result season will dictate the market direction as well as the outcome of the trade talks between the US and China.
The rupee pared most of its initial losses and settled the day marginally down by 5 paise as China offering to buy additional US goods to ease trade tensions.
On the institutional front, FPIs were net sellers in Indian markets for Rs 485 cr while the DIIs were net buyers to thr tune of Rs 956 cr, provisional data showed.
As many as 6 companies will declare their results for September quarter which include names like IndusInd Bank, TCS, Avantel Ltd etc. among others.
IndusInd Bank: PAT likely to grow by 43% YoY
TCS: PAT likely to grow marginally by 0.5% YoY
(All estimates are from Motilal Oswal)
The Nifty formed a strong bullish candle on the daily charts after 6 consecutive bearish candles
It is not trading above crucial short and long term moving averages which is a positive sign
The next resistance can be seen at 100-DMA placed at 11406, and a break above this level could take the index towards 11500-11554 levels
Some experts are even speculating that a bottom is in place and the Nifty could retest 12,000 levels in the next few weeks.
Investors are advised to consider selective accumulation while traders can remain long with broader market level of 11000, suggest experts.
Three levels: 11,110, 11406, 11554
Maximum Call OI -- 12000 followed by 11500 strike.
Maximum Put OI -- 11000 followed by 11200 strikes
Stocks in news:
Telecom operator Bharti Airtel on October 9 said it has raised $750 million (about Rs 5,330 crore) from investors based in Asia, Europe, and the US through a hybrid financial instrument.
Coal India Ltd has lost 13 million tonnes, or 2.1%, of its annual output this financial year, due to strikes at eastern Indian Talcher coalfields, one of India's biggest, a spokesman for the company's unit said on Wednesday.
RIL: Country's largest telecom operator Reliance Jio on Wednesday announced that its customers will now have to pay 6 paise per minute for voice calls made to rival phone networks.
We spoke to Reliance Securities and here’s what they have to recommend:
Bharti Airtel: Buy| LTP: Rs 359| Target: Rs 390| Stop Loss: Rs 328| Upside 8%
Axis Bank: Buy| LTP: Rs 686| Target: Rs 750| Stop Loss: Rs 620| Upside 9%
LIC Housing Finance: Buy| LTP: Rs 378| Target: Rs 425| Stop Loss: Rs 350| Upside 12%
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