WHAT LIES AHEAD : NEAR-TERM PICTURE
Indian stock markets broke out of a prolonged breather after India overcame 30 other countries to achieve 100 th position in ease of doing business. Further, the Federal Reserve's decision to keep the interest rates unchanged in the recent policy review buoyed the US markets and thereby other bourses across the world. However, markets went into standby mode yet again on account of subdued auto sales numbers, with Maruti Suzuki emerging as the only organised player posting highest single digit growth. Markets ignored the core data, which grew by 5.2%, its highest pace in the financial year. As it is, markets are likely to remain volatile in the ongoing corporate earnings season. The FIIs seemed to have re-entered Indian equity markets, while the DIIs maintained their positions.
Broader markets outperformed the benchmark indices by gaining more than 2% since last Thursday. Among the sectors, realty was yet again the winner with 7.7% gain. On November 2, though pharma posted over 3% gains, PSU banks and FMCG refrained the markets from gaining further with losses of 1% and more. Overall, the market breadth remained weak with 746 advances and 810 declines on the NSE.
Since the beginning of the week, Nifty index traded in a narrow band; however, on Wednesday, Nifty regained momentum after the brief consolidation and formed a sizeable bull candle, which broke out of the narrow trading range signalling resumption of upward momentum. On Thursday, Nifty registered high of 10,453, and thereafter, it consolidated in a range for the entire trading session, which resulted in the formation of a small body bear candle. Now, going forward, the bullish gap area formed on Wednesday between 10,36810,383 will act as an immediate support for the Nifty, whereas a decisive close below this gap area will result in further correction up to levels of 10,300-10,320. On the other hand, the level of 10,482 could act as a resistance level as it is 161.80% retracement level of the down move. A decisive close above this level may well result into further upside toward the levels of 10,540-10,600.