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Dalal Street week ahead: 10 key factors that will keep traders busy next week

Keeping in mind the prevailing trend and excessive volatility, it’s prudent to maintain extra caution while selecting stocks and prefer hedging positions, says Ajit Mishra of Religare Broking.

October 31, 2021 / 07:36 AM IST

Bears had a strong control over Dalal Street in the week ended October 29 with the benchmark indices witnessing the biggest weekly fall (down 2.5 percent each) in last eight months as global brokerage houses - Morgan Stanley and Nomura - downgraded Indian equities to equal-weight and neutral, respectively, from overweight due to expensive valuations. Dull global cues, profit booking by FIIs & DIIs, and mixed September quarter earnings with reflecting inflationary pressure in margin due to higher input prices also weighed on the sentiment.

The BSE Sensex fell below psychological 60,000 mark, declining 1,514.69 points to 59,306.93, and the Nifty50 broke 18,000 levels, down 443.25 points to 17,671.65, continuing downtrend for the second consecutive week. The selling pressure was seen across sectors with private bank, IT, metal and realty indices being the biggest losers. The correction in the broader market was slightly less than the benchmarks as the Nifty Midcap 100 and Smallcap 100 indices shed nearly 2 percent each.

The coming truncated Diwali week is going to see a lot of events including earnings, US Federal Reserve meeting, monthly auto sales and PMI numbers. The nervousness seen on Dalal Street led by profit booking and consolidation in the previous week is expected to continue in the coming days as well, experts feel.

"We are seeing profit taking for the last two weeks and indications are pointing towards a further slide. Keeping in mind the prevailing trend and excessive volatility, it’s prudent to maintain extra caution in the selection of stocks and prefer hedged positions," said Ajit Mishra, VP Research at Religare Broking.