Analyst Somesh View - Weekly Comments on 08th OCT 2021

2021-10-08 18:20:55 By Somesh

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Nifty formed a doji pattern on the daily chart as the closing was near the opening level. On the weekly chart, Nifty formed a bullish candle.

Sensex closed 381 points up at 60059, while the Nifty gained 104 points to 17895. Sensex gained 2.2 percent and the Nifty 2.6 percent during the week.

Nifty remained in a narrow range of 100 points throughout the day but buying was seen at every intraday declines.

Markets extended their rally for the second consecutive session after the Reserve Bank of India left policy rates unchanged and seem to gradually move towards policy normalisation.

Positive Asian cues and buying in IT stocks as well as heavyweight Reliance Industries also supported the rally.

Interest to allocate in Indian equities continue, net sales is broadly positive in all categories of funds essentially in Multicap and Flexicap Funds. In addition to regular flows and incremental SIP inflows, NFO’s also have been creating a lot of interest amongst investors. It is also very encouraging to see much better inflows in dynamic/balance advantage funds as in current times of rising markets and premium valuations, this category of funds will allow to control risk of investors much more efficiently.

Domestic indices traded higher with optimism underpinned by dovish RBI policy and mixed global cues due to US jobs data awaited later in the day.

Six member monetary policy committee (MPC) decided to keep repo rate unchanged at 4 percent and reverse repo rate at 3.35 percent.

RBI would continue with the accommodative stance as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of Covid-19 on the economy, while ensuring that inflation remains within the target going forward.

As expected, RBI kept key policy interest rates unchanged for an eight straight meeting (last cut was in the month of May 2020) in order to support economic recovery.  Also MPC has reiterated an accommodative stance to support sufficient liquidity and financial stability.

Nifty has to hold above 17850 for an up move towards 18000 and 18200 level, whereas on the downside, support is seen at 17763 and 17597 level.

Option data indicated that the Nifty could see a broader trading range of 17400/18200 and the immediate trading range could be 17600/18000.

On the sectoral front, IT index gained 2 percent, the PSU Bank index 1.65 percent but realty and FMCG succumbed to selling pressure.


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