Stock Market Update: Sensex, Nifty Recovery to Continue?

Sensex at 34474 and Nifty closed at 10348 on Monday. This week the stock market will be affected by the economic data, corporate result, global market trend. Movement of Indian rupee against the dollar, and crude oil price movement continue to remain key factors.

Investment by foreign portfolio investors (FPIs) and domestic institutional investors (DIIs) will also be crucial.

Indian Stock Market Performance Today

In the foreign exchange market, the partially convertible rupee is at 74.025 level, compared with its close of 73.76 during the previous trading session.

In the global commodities markets, Brent for December 2018 settlement was down $1.11 a barrel at $83.05 a barrel. The contract had fallen 42 cents, or 0.50% to settle at $84.16 a barrel during the previous trading session.

In global market, European markets are trading lower on Monday, after broad declines in Asia after China’s central bank cut reserve requirements for banks.

Asian markets also slipped further on Monday. Japan’s market is closed for a public holiday. China’s markets tumbled following a week-long holiday and after its central bank cut banks’ reserve requirements in a bid to support growth. Reserve requirement ratios (RRRs) – currently 15.5 percent for large commercial lenders and 13.5 percent for smaller banks – would be cut by 100 basis points effective October 15, the People’s Bank of China (PBOC) said on Sunday.

US stocks closed sharply lower Friday on the back of worries about rising interest rates overshadowed the September jobs report, which had pointed to strength in the labor market and the broader economy.

In today’s market in India, Oil sector stocks surged and private banks stocks witnessed the rise. Metal stocks were weak and witnessed fall.

Mutual Fund Activity

In September, Income funds witnessed net outflows of Rs 32,504 cr compared to the outflow of Rs 6,520 cr in August. However, the Equity schemes experienced net inflow of Rs 11,093 cr in September Vs Rs 5,923 cr inflow in August. This means the domestic players are investing in stock market that has already fallen. Meanwhile, the FII are net sellers from the past one month in equity

Upcoming Events for this week

On the economy front, India’s industrial production data for August 2018 will be declared on 12 October 2018. India’s industrial production had risen 6.6% from a year earlier in July 2018, after revised 6.9% increase in the previous month.

The all-India general consumer price index (CPI) inflation data for September 2018 will also be declared on 12 October 2018. Annual consumer inflation declined to 3.69% in August 2018 from 4.17% in July.

Among corporate results, IT major TCS will declare its Q2 result on 11 October 2018.

The Caixin China Composite PMI for September 2018 will be unveiled on 8 October 2018.

On the political front, the Election Commission (EC) on Saturday had announced the dates for the Rajasthan, Madhya Pradesh, Chhattisgarh, Telangana and Mizoram Assembly polls. While Chhattisgarh will go to the polls in two phases on November 12 and 20, the Madhya Pradesh and Mizoram Assembly elections will be held on November 28. Polling in Rajasthan and Telangana will be held on December 7. Counting of votes will be held across all the five states on December 11.

Conclusion

As mentioned in the previous article, nifty had extended losses. Its major resistance remains at 11,150 level and has support at 10,275 level.

The stock market might recover before the state election starts.