What is your stock market view for 11tt October and how do you suggest I should trade in this market?

On Friday, the Sensex closed above the psychological 60,000 mark while the Nifty closed very near to the 18,000 mark. The rally was again led by Reliance Industries and supported by Wipro and Infosys. Most tech stocks rallied after strong earnings by TCS in the latest quarter. However, RIL rallied in the midst of its inorganic acquisitions in new energy.

There was also a broader monetary trigger in the form of the monetary policy on Friday and RBI held on to the repo and reverse repo. Even the accommodative stance was continued. In short, the RBI has signalled that it would not disrupt the current liquidity positions in the market with any kind of disruptive measures. Status quo really favoured markets.

Foreign investors net sold Rs.64 crore of equities while domestic funds sold Rs.168 crore. Gross numbers did indicate ample activity in institutional desks. Among global markets, the Dow closed flat and NASDAQ lower. Overall European markets were mixed and the SGX is trading 30 bps lower in early trades. Cues from Asia and Dow Futures will hold the key.

The strategy should be to stick to a buy-on-dips strategy for now. Many of the large caps are being priced aggressively but that is due to forays into segments like digital, green energy etc. The moral of the story is to look for that new age story, sector are immaterial. As long as there is a new age story and solid financials, buy-on-dips should work perfectly.