Market Khabar

Buoyed by good corporate earnings ahead of Diwali, M&A deals and steady macro economic data, markets extended gains for second consecutive week to close near all-time highs.

Moving up sharply, the benchmark indices the Sensex and the Nifty gained 618 points and 188 points to close at 32,432 and 10,167 respectively.

The broader market represented by mid- and smallcap indices also continued to move higher portraying the “bubbly” market sentiment. It is pertinent to observe that as far as monthly trends are concerned, FIIs have been net sellers to the extent of `6,476.58 crore worth of shares, while DIIs purchased `7,050.10 crore till date.

The talk of a stimulus to boost growth sparked concerns of fiscal slippage and FIIs are on selling spree resulting in rupee weakness.

For the first time in its rule, the government is facing sustained discontent over economic policies as growth slows, job losses mount and distressed farmers protest. However, statement from the PM that his government is fully committed to reverse the trend and is “ready to take decisions” has infused positive sentiment.

Inflation unexpectedly slowed in September reviving expectations for an interest rate cut to spur flagging growth. The weaker-than-expected inflation could add pressure on RBI to cut rates to revive growth that has been slowing for the past five quarters. The IIP data indicate a mild recovery.

Near-term direction of markets will be dictated by Q2 earnings, wholesale inflation numbers, movement of rupee, investment trends of FIIs and DIIs and crude oil prices.