InvestorQ : What is your outlook for the Nifty and Sensex on 20 October? Do you see the rally of Monday lasting on Tuesday also?
Debbie Mascarenhas made post

What is your outlook for the Nifty and Sensex on 20 October? Do you see the rally of Monday lasting on Tuesday also?

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diksha shah answered.
8 months ago
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The sharp rally on Monday was largely led by short covering in private banks after the strong results announced by HDFC Bank late last week. That may not really last much longer so you need to be cautious on the bank story.

During the rally on Monday, Sensex settled above the 40,000 mark but however the Nifty could still struggle to take out the 12,000 level. That will be the bullish signal. For now, the trends are likely to be driven more by the quarterly results that are flowing in.

If you look to foreign buying, it is encouraging. FPIs were net buyers of Rs.1657 crore while DFIs sold Rs.1621 crore on Monday. FPI buying has been the trend for few months but it is the domestic selling that is pointing towards a domestic liquidity crunch, despite liquidity infusion by the RBI.

The real challenge will be the global cues which are negative on Tuesday. Dow and NASDAQ corrected 1.7% on Monday on the back of rising COVID cases and uncertainty over outcome of the US Elections. This triggered bouts of market volatility. Europe was also down across FTSE, DAX and CAC and SGX Nifty is 60 bps down in morning trades.
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