Indian markets closed on an optimistic note buoyed by rate cut announced by RBI, steady global markets and positive vibes of the PM’s visit to US. Benchmark indices the Sensex and the Nifty gained 357 points and 83 points to close higher at 26220 and 7951. It is pertinent to observe that while FIIs pulled out Rs 17,434 crores in August and Rs 6,475 in September, domestic funds bought shares worth Rs 10,533 crores in August and Rs 8,671 crores in September. Market experts attribute FII outflows to sustained global risk-off trend along with concerns over economic slowdown and currency devaluation in China.
Dovish statement of RBI and assurance that it will be accommodative and work in tandem with the government has instilled confidence among market participants. With no immediate triggers, direction of market will be dictated by Q2 earnings, global cues, FII investment trends and announcements from government. Weekend ugly US jobs report casts doubts over rate hike by US Fed this year. Spooked by turbulence in China, vague US Fed policy, crash in oil prices and slowdown in earnings growth; barring an unbelievable year end Santa Claus rally, US stocks are poised for worst year since 2008. For the week ahead chartists predict trading range of 25600-26700 for the Sensex and 7750-8125 for the Nifty. Immediate supports for the indices are at 25950 & 25600 and 7850 & 7750. Stock price movements actually begin to reflect new developments before it is generally recognized that they have taken place. Use earnings season to accumulate good companies delivering consistent results.
