WHAT LIES AHEAD : NEAR-TERM PICTURE
This time September derivatives expiry brought in buoyancy in the markets wherein benchmark indices strived to bounce back. Markets rebounded after taking support at crucial technical levels of 9685 and 31081 in Nifty and Sensex, respectively. Robust macroeconomic data at the start of October 2017, including better-than-expected auto sales numbers fuelled by launches and festive demand. Tata Motors and Maruti posted 18% and 10% growth in September as compared to the corresponding month of 2016.
Core sector grew 4.9%, followed by manufacturing and services PMIs hitting above the minimum expansion number of 50. However, ahead of rising inflation and falling economic growth forecasts, RBI maintained rates this time in its policy review. Now, corporate earnings are at the doorstep and markets are likely to react to the results of major index stocks.
Broader markets outpaced benchmark indices during the period, where Mid-cap and Small-cap indices gained 2.5 per cent and 3.2 per cent, respectively. Considering sector-wise performance, Realty index remained the highest gainer with 4.3 per cent gains, while Auto and Metal followed with 2 per cent plus gains each. Considering the latest session, yet again Realty saved markets from falling further, gaining 0.9 per cent. Despite weakness in benchmark indices, market bias remained positive with 826 advances and 637 declines on the NSE.
Nifty, after registering swing low of 9687.55, witnessed an upmove and logged four consecutive sessions of gains. However, Nifty has been facing strong resistance in the area of 9,930-9,950 as 50-day EMA is placed in this zone and 50% retracement of the recent fall stands at 9,933. Going forward, if Nifty manages to sustain above 9,930-9,950 on a closing basis, it may scale up to the levels of 9,990-10,000 as 61.8% retracement is placed in this zone. On the downside, supports are seen at 9,850 and 9,800 levels. A decisive breach of 9,800 may open up for correction up to levels of 9,740 and 9,680 in the short term.