This week was a record one for the stock market. Benchmark indices touched new highs. Strong rally in tech, capital goods, energy and select automobile stocks BSE Sensex crossed the 60,000 point level and managed to maintain it. Reducing the risk of default of China’s Evergrande, the outcome of the US Federal Reserve meeting, buying by domestic institutional investors were the main reasons to strengthen the market sentiment.
The BSE Sensex gained 1,032.58 points or 1.75 per cent this week and closed at 60,048.47. The Nifty 50 was up 268.05 points, or 1.52 per cent, at 17,853.20.
These factors could be important for the market next week:
corona virus and vaccination
With the pace of vaccination increasing across the country, the increase in its infection cases per day stood at less than 35,000 last week. The positivity rate has also come down below 2 percent. Corona cases are more in Kerala, Maharashtra, Tamil Nadu, Mizoram and Andhra Pradesh.
So far, more than 84 crore people have been vaccinated. Due to this, about 46 percent of the country’s population has received the first dose of the vaccine and 16 percent of the population has been fully vaccinated.
Focus on Multiplex and Real Estate Stocks
The Maharashtra government’s decision to reopen theaters and auditoriums from October 22 will provide some relief to the multiplex chain operators. Experts believe that buying may increase in stocks like PVR and Inox. These companies have suffered heavy losses due to the lockdown.
There was good buying in real estate stocks this week. Oberoi Realty, DLF and Mahindra Lifespace Developers set record highs. This sector may also remain bullish next week.
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IPO
The public offer of Aditya Birla AMC will open on September 29. The price band for this is Rs 695-712 per equity share. Aditya Birla Capital and Sun Life AMC have stake in this company. In the IPO, there will be an offer for sale from both the shareholders. In this, they will sell 3,88,80,000 equity shares.
listing
Paras Defense will be listed next week. The issue was subscribed 304 times. Its issue price is expected to be Rs 175 per share. The company’s stock is trading at Rs 405-425 in the gray market.
automobile sales
Automobile sales figures for September will start coming from October 1. The market will keep an eye on this. Experts believe that the lack of chips may have an impact on sales. Stocks of Tata Motors, Maruti Suzuki, Mahindra & Mahindra, Eicher Motors, Bajaj Auto, Ashok Leyland, Hero MotoCorp and Escorts will be under heavy pressure.
Automobile stocks have been underperforming so far this financial year.
FII and DII
In the absence of Foreign Institutional Investors (FIIs), Domestic Institutional Investors (DIIs) bought a lot in the stock market this week and played a big role in its rally. The flow of both FII and DII will be monitored next week. However, experts believe that selling from the FII side could be higher.
technical point of view
Nifty 50 has formed a small bearish candle which is like a spinning top type pattern on the daily charts. A bullish candle has formed on the weekly charts. There may be some consolidation in the market in view of the bullish momentum this week. Support for this is at 17,600 and resistance at 18,000 point.
Nagraj Shetty, Technical Research Analyst, HDFC Securities said that Nifty has formed a long bullish candle on the weekly chart which is covering the previous bullish candle. This indicates a bullish trend in the medium term and some downside in the short term.
Signals from F&O
From the options data, Nifty is expected to remain in the range of 17,500-18,000 for the next week. The maximum call open interest is at 18,500 followed by 18,000 and 17,900 strikes. The maximum put open interest was at 17,000 followed by 17,500 and 17,700 and 17,800 strikes.
Experts believe that the call base at 18,000 may turn out to be a hurdle in the short term.
economic data
Fiscal deficit and infrastructure output and current account data for the first quarter will be added next week. Market Manufacturing PMI for September and Foreign Exchange Reserve for the week ended September 24 will also be available.
global data
Stock markets around the world will be watching China’s Evergrande Group next week. Another interest payment on its bond is scheduled for Wednesday. It has to make some more payments on the bond by the end of this year. In the event of their default, the stock markets may also suffer.
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