What is your view on the stock market and the Sensex for 13 October, Tuesday? Will the IT rally still continue?

Monday was the ninth day of the rally in the Nifty and Sensex. While Sensex is above 40,000, the Nifty is still to cross 12,000, which would be a signal of a medium term uptrend in the market. For now, the rally is showing no signs of tapering.

The rally has been largely driven by the consistent sector rotation that appears to be working for the market sentiments. After a sharp rally in pharma there was a short rally in banks. For now, heavyweight IT stocks have taken over the rally since the TCS results.

For the 12 of October, foreign portfolio investors or FPIs were net buyers to the tune of Rs.615 crore while DFIs sold Rs.1029 crore worth of equities. This trend of FPI buying and DFI selling has been on since most domestics currently struggle with liquidity management.

In terms of the global market sentiments, Dow was up close to 1% but NASDAQ spurted 2.6% on hopes of a weak dollar. In Europe, DAX and CAC were in the positive even as FTSE was tepid. SGX Nifty is trading positive in early trades and the driver could still be IT stocks.

If one were to look at the two important items of macro data on CPI and IIP released on Monday, it has been less than encouraging. However, high inflation and low growth also means that the RBI accommodative stance will continue well into 2021, even if no rate cuts.