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Indian markets are closed on Wednesday on the occasion of the Dussehra celebration across the country. In the last trading session, both benchmarks Sensex and Nifty 50 climbed more than 2% as investors prepare for the second-quarter earnings season for FY23. The markets will resume their trading on Thursday and the performance to likely track global cues. However, the near-term structure of the market looks positive and experts have suggested buying on intraday correction while selling on rallies to traders.
On Tuesday, markets witnessed a strong rally led by broad-based buying across sectoral indices. Banking, capital goods, metals, and IT stocks were the best performers. Midcap and small-cap too climbed significantly. The Indian currency appreciated, while foreign funds inflow also gained traction. Overall, the global equity markets sentiment was positive as well with a retreat in bond yields, rising crude oil prices, and a pullback in the dollar index.
Sensex ended at 58,065.47 up by 1,276.66 points or 2.25%. While Nifty 50 soared by 386.95 points or 2.29% to close at 17,274.30.
The Indian rupee appreciated against the American currency to close at 81.52 per dollar on Tuesday at the interbank forex market. While foreign investors (FII) funds inflow picked up to ₹1,344.63 crore cumulatively in the equities market on October 4 -- higher than inflows of ₹590.58 crore on October 3.
Mitul Shah - Head of Research at Reliance Securities said, "The market sustained deep losses for the first nine months of the year as central bank officials have increasingly made clear that interest-rate increases and monetary tightening will continue."
Shah added, "Markets are awaiting 2QFY23 earnings results for further cues, which will start from next week. The central banks globally are in the midst of inflation firefighting as many are rapidly raising their policy rates. The RBI raised its key repo rate by 50 bps to curb rising inflation. RBI may have to keep up with the monetary policy tightening and a further rate hike of 35 bps is expected in Dec’22. India in all likelihood to prevent recession while the US and Europe headed towards it. The market given positive response to the commentary on India's growth impulses and projection of 7% GDP growth with 6.7% inflation for FY23."
All eyes are set on TCS Q2 earnings which are scheduled on October 10. IT stocks will be in focus due to their quarterly results. Peers HCL Tech and Wipro will announce their Q2 financial performance on October 12, while Infosys and Mindtree are set to announce Q2 results on October 13.
Among autos, Bajaj Auto Q2 results will be keenly watched that will be announced on October 14. In the banking sector, HDFC Bank's Q2 earnings are eyed which will be presented on October 15.
Other companies will accordingly announce their Q2 in the following days to come.
On Nifty 50, Rupak De, Senior Technical Analyst at LKP Securities said, "Nifty has moved higher after consolidation on the daily chart suggesting a rise in optimism among the market participants. The index has placed itself above 200DMA, which is a bullish setup. The momentum indicator has entered a bullish crossover. The short-term trend looks positive. A decisive move above 17300 may induce a strong rally in the market. On the lower end, support is placed at 17090; resistance on the higher end is visible at 17600/17725."
The near-term outlook of markets is optimistic. Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities said, "The short-term market structure is positive but due to temporary overbought condition we could see range bound activity in the near future. For the traders now, 17200-17150/57800-57600 would be the key support zone whereas 17400-17425/58300-58400 would act as an important resistance zone for Nifty. Buying on intraday correction and selling on rallies would be the ideal strategy for the day traders."
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.