InvestorQ : How do you see the stock market action for Nifty and Sensex on Monday 17th October?
Mary Joseph made post

How do you see the stock market action for Nifty and Sensex on Monday 17th October?

diksha shah answered.
2 months ago

Let me first focus on what happened on Friday last week. The Nifty gained 171 points on Friday as the index settled at 17,186 levels, but make no mistake that the 17,000 level still remains crucial with no clear direction emerging for now. On the positive side, the RBI minutes indicate the time may be ripe to shift focus from inflation and on to growth.

In terms of market internals, the advance decline ratio or the A/D ratio at 30:20 remained favourable. The stock upside move was largely led by a bounce in banking and IT socks on Friday. However, the sectors like oil, metals and autos remained under pressure on Friday. With most of the data flows done and dusted for the month, it should be about technicals.

FPIs have turned net sellers after their brief dalliance with buying in August and first half of September 2022. Foreign investors were net sellers in equities to the tune of Rs.1,011 crore as domestic funds and LIC bought stocks worth Rs.1,624 crore on Friday. FPIs have sold close to $1 billion in the first half of October although domestics are still giving support.

What about global market cues? That is the real driver on Monday. Remember that on Friday, the Dow fell 404 points and NASDAQ fell 328 points as the tech majors reacted negatively to sharp dollar appreciation. Europe was strong but the SGX Nifty is trading 129 points lower in early trades, as a direct reaction to the US market fall.

Let me finally come to the market view for the day. It promises to be a weak start on Monday due to negative late cues from the market but we must await Dow futures action and European market opening later in the day. The hints coming from the Fed minutes were positive as it indicates that there could be a shift to GDP focus with inflation still sticky. However, global headwinds are not going away in a hurry so the focus would still be on domestically oriented stocks which do not have major exposure to global factors.