It was for the third consecutive time in as many months that Sensex breached the 60,000 mark. “While mostly driven by second quarter results, it indicates that key supports are just below the 60K levels. It also signifies Indian market’s readiness to further take-off once it crosses 60K levels satisfactorily,” said Anmol Das, Head of Research, Teji Mandi.
Amid sectoral rotation in the market, the upside is being led by PSU stocks as Nifty PSU Bank, Nifty CPSE and Nifty PSE were the top sectoral gainers. Heavyweight banks and IT stocks too joined the rebound.
In the near term, the market mood will be decided by US Fed Chair Jerome Powell who is expected to announce a fourth straight round of 75 basis point rate hike on November 2 to tackle inflation.
“Investors are hoping for a smaller rate hike by the US Federal Reserve this week against the earlier expectation of a more aggressive rate increase. This optimism has fuelled a sharp upsurge, which has pushed both the local benchmark indices above their key psychological levels,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
However, if the Fed adopts any hawkish stance, markets could be in for a steep correction in the near term.
“Traders should not be surprised if the Fed avoids non-committal to taking a side with the debate for a downshift for the December meeting,” said Edward Moya, senior market analyst, OANDA.
The Sensex is now just about 1,500 points away from hitting all-time highs. “There are higher chances that the Indian markets may touch new highs by the end of this calendar year,” said Amit Jain, Co-founder, Ashika Global Family Office Services.
Nifty’s track record of the last 10 years shows that the index gave positive returns five times in November with the pandemic-hit 2020 turning out to be the best one with an 11.4% monthly return.
Besides the US midterm elections next week, traders would also be looking for cues from RBI Governor Shaktikanta Das, who has scheduled a special meeting of the central bank’s monetary policy committee on November 3 for failing to achieve inflation target for three consecutive quarters.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)