InvestorQ : What is your trading call for 17th September? What exactly is driving this rally in the Nifty and Sensex?
Dia Deshpande made post

What is your trading call for 17th September? What exactly is driving this rally in the Nifty and Sensex?

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diksha shah answered.
3 months ago
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You are in a market where the Nifty is approaching 18,000 and the Sensex is approaching 60,000. Now, it is all about reforms, and big reforms at that. The story was about Telecom Relief Package on 15th September and on 16th September it was all about the creation of the Bad Bank with government guarantees. Bad bank will address bad loans of Rs.2 trillion.

One thing is clear that it would smartly impact the cash flows of stressed banks as they can now get 15% in cash and the balance in security receipts. This is likely to be a big boost for banks like BOB and IOB where the quality of assets is relatively good and improving. Telecom has been another big story after the relief package on Wednesday.

Foreign portfolio investors were net buyers worth Rs.1,622 crore on 16th September while DFIs sold equities of Rs.795 crore. FPI interest appears to be building up with the focus on big reforms. Global markets saw flat performance from the US and Europe while the SGX Nifty is up nearly 40 bps in early trades on Friday. There could be some weekend pressure.

If you look back, this week the rally has been largely on the back of reforms. Big bang reforms like bad bank and telecom relief plus the massive automobile PLI package have all come in the last 2 days. Clearly, markets are enthused and are expecting a surge in buying interest coming from foreign investors in the light of all these reforms.

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