Sensex pares gains after 100-point rally; Nifty50 holds 8,700 level


The S&P BSE Sensex pared morning gains after rallying over 100 points in morning trade on Monday led by gains in ITC, RIL, Tata Motors, HDFC, Axis Bank, and Infosys.

The Nifty50 reclaimed its crucial level of 8,750 supported by gains in metal, consumer durables, FMCG, oil & gas, banks and realty stocks.

At 10:00 am: The 30-share index was trading 52 points higher or 0.19 per cent at 28,113. It touched a high of 28,216.64 and a low of 28,086.04 in morning trade.

The Nifty50 was trading at 8,718 up 21 points or 0.24 per cent. It touched a high of 8,745.80 and a low of 8,710.65 in the first 45 minutes of trade.
The S&P BSE Midcap Index was up 0.42 per cent and BSE S&P Smallcap Index was trading 0.44 per cent up.

Tata Steel (up 2.3 per cent), Asian Paints (up 1.2 per cent), Cipla (up 1.1 per cent), ITC (up 0.7 per cent), and Maruti Suzuki (up 0.7 per cent) were the major Sensex gainers.

HDFC (down 1.04 per cent), Bharti Airtel (down 0.9 per cent), Adani Ports (0.5 per cent) and TCS (down 0.42 per cent) were the major Sensex losers.
The domestic equity indices are likely to trade with a positive bias on Monday, ahead of the release of factory output numbers later in the day.

Investors would react to Friday’s US non-farm payrolls data which eased for the third straight month in September. However, the data was seen strong against forecasts and has further strengthened fears for a rate hike by Federal Reserve in the near future, which may not be taken positively by markets world over

Currency fluctuations globally and change in oil price movement would also be keenly watched.

Fischer’s comments raise rate hike chances : US Fed Vice Chair Stanley Fischer on Sunday said that there appears little risk of falling behind the curve in the near future and that gradual increases in the federal funds rate would be sufficient to get a monetary policy to a neutral stance over the next few years.

“With the unemployment rate not far from levels that most Federal Open Market Committee (FOMC) participants view as normal in the longer run and the rise in the participation rate, I see the US economy as close to full employment, with some further improvement expected,” Fischer said in a statement.
Cues from Singapore were positive: At 08.00 am, Nifty50 futures on the Singapore Stock Exchange were trading 30 points higher at 8,744, indicating a positive opening for the domestic market.

“Overall, the market is clearly in a narrow trading range. Most of the time, whenever there is a very strong market and specific kind of news flows, the market takes pause and tries to consolidate. It is the same kind of scenario that we are going to see in the next few days of ..
time,” Shrikant Chauhan of Kotak Securities said.

Upside looks limited: Experts said that the upside remains limited and the market will remain rangebound next week.

“The Nifty50 formed a ‘Hammer candle’ on the daily chart and if it manages to witness followup buying, and if it takes the index above the 8,720 mark, then the immediate bottom may move towards 8,780 and 8,820 levels,” Chandan TapariaBSE 4.99 %, Derivatives & Technical Analyst – Equity Research at Anand Rathi Financial Services, told ..

Look for midcap opportunities: Some experts believe it is the right time to buy into midcap stocks.

“At 18, are Sensex companies going to give you 18 per cent profit growth? Are midcaps going to you 20 per cent profit growth with P/E at 20? Midcap companies are more operationally and financially leveraged. So a 10 per cent growth in sales will lead to a 25 per cent growth in profit margins, whereas larger cap companies with 10 per cent growth in sales could only le ..

lead to 11-12 per cent growth. The probability of a midcap company beating that 20 PE with earnings growth forecast is much-much higher than a Sensex company beating that 18 forecast,” said Sunil Subramaniam, CEO, Sundaram Mutual

Crude oil prices eased on Friday: Brent crude closed 58 cents, or 1.1 per cent, lower at $51.93 a barrel on Friday after falling short of hitting 52-week high earlier in the session. Light sweet crude oil price fell 63 cents, or 1.3 pe rcent, to settle at $49.81.

OPEC members have recently decided to cut crude output to 32.5 million-33 million barrels per day, down 700,000 bpd from a global glut estimated by analysts at 1.0 million to 1.5 million bpd, Reuters reported.

Asian markets stay mixed: After remaining closed for the entire week on account of National Day celebrations, the Chinese CSI300 rose 0.53 per cent to 3,021 on Monday morning.

Japan’s equity benchmark Nikkei was trading 0.23 per cent lower at 16,860. Other Asian indices, including Hong Kong’s Hang Seng (down 0.4 per cent), and South Korea’s Kospi (down 0.2 per cent), were trading lower.

US markets settled lower on Friday: The Dow Jones industrial average dropped 28.01 points, or 0.15 per cent, to settle at 18,240.49. The S&P 500 edged 7.03 points, or 0.33 per cent, lower at 2,153.74. The Nasdaq Composite index lost 14.45 points, or 0.27 per cent, to 5,292.41.

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