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Last Updated : Oct 27, 2020 05:51 PM IST | Source: Moneycontrol.com

After The Bell: Market resumes upward march; what should investors do on Wednesday?

Forecast of higher FII inflows to India, based on an MSCI report, helped the market despite weak global cues.

Despite weak global cues, headline indices the Sensex and the Nifty resumed their upward march on October 27, buoyed by an MSCI report that may result in higher FII inflows into India.

The Sensex ended 376.60 points, or 0.94 percent, higher at 40,522.10 and the Nifty gained 121.60 points, or 1.03 percent, to 11,889.40.

The BSE midcap outperformed the benchmark, rising 1.65 percent while the BSE smallcap index rose 0.60 percent.

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Buying was witnessed in financials, auto, FMCG, infra and pharma while profit-booking was seen in the IT stocks.

Morgan Stanley Capital Investment (MSCI) said on October 27 it will tweak the foreign ownership limits for India stocks in its global indexes from December 1.

Here is what experts say on what investors should do on October 28:

Vinod Nair, Head of Research at Geojit Financial Services

Forecast of higher FII inflows into India, based on the MSCI report, helped the market to strongly outperform despite a weak global market.

The sustenance of such a trend is low given increasing concerns over the worsening spread of viruses in the West, which has weakened their markets for further correction.

The Indian market is expected to follow with an increase in volatility in the coming days as we head close to the US election and more economic restrictions due to the devastating rise in coronavirus cases.

Deepak Jasani, Head, Retail Research, HDFC Securities

The next band of resistance for the Nifty is 11,942-11,975. A negative advance-decline ratio suggests caution in the broader market and the possibility that the positive sentiments arising out of MSCI rejig may not last long.

Ajit Mishra, VP - Research, Religare Broking

The rebound in the Nifty indicates that the prevailing consolidation phase will continue and we might have to wait for the next directional move.

Markets are offering trading opportunities across the board and traders should proactively manage their positions in such a scenario.

Investors, on the other hand, should not give much weightage to these short-term price fluctuations and maintain their focus on accumulating fundamentally sound stocks on dips.

Chandan Taparia, Vice President | Analyst-Derivatives, Motilal Oswal Financial Services

The Nifty formed a bullish candle but an inside bar as it moved inside the trading range of the last session.

The index again got stuck in a range where declines are being bought while multiple hurdles are intact at 12,020 zones.

Now, it has to continue to hold above 11,777 zones to witness an upmove towards 12,020, then a fresh move towards 12,100-12,200 while on the downside, major support exists at 11,666.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities

A reasonable positive candle was formed on October 27, just beside the long negative candle the previous day. Technically, this pattern signals a smart comeback of the bulls from the lower levels.

On the last few occasions, the formation of such long bear candles has failed to show any reasonable follow-through declines.

Hence, the upside bounce of October 27 after a long negative candle of the previous session could possibly mean more upside in the market.

This signals an inherent strength of the bulls below the key overhead resistance of the 12,000-mark. Such repeated actions below this hurdle could eventually open doors for a decisive upside movement above the 12,000-mark in the near-term. Immediate support is placed at 11,710.

The important long support is intact for the market as per the weekly timeframe chart around 11,650-11,600 levels (intermediate trend line, as per the concept of change polarity). The Nifty is placed in a range movement on the weekly chart.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
First Published on Oct 27, 2020 05:51 pm
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