This Week in a nutshell (Oct 11th to Oct 14th)

This Week in a nutshell (Oct 11^th to Oct 14^th)

Technical talks

NIFTY opened the week on 11^th Oct at 17,895 and closed on 14^th Oct at 18,339. During the week, NIFTY gained 2.5 percent and saw a bullish candle formation on the weekly scale. At the current juncture, support for Nifty is placed at 17,881 and 17,685 zone, while resistance can be seen around 18,365 levels.

On the sectoral front, Nifty PSU Bank, Auto and Metal index were the top gainers while Nifty IT was the only loser this week.

Weekly highlights

• The week started with TCS quarterly numbers. The IT sector was in red as the numbers fell short of analysts’ expectations.
• An investment worth Rs 75,000 mn by TPG Rise Climate and Abu Dhabi’s ADQ in Tata Motors newly formed subsidiary for the EV business uplifted the market sentiments.
• On Wednesday:
  • Government released retail inflation data. It declined to 4.35 percent in September, mainly due to lower food prices. Consumer Food Price Inflation (CFPI) for September stood at 0.68 percent in September, compared with 3.11 percent in August.
  • Industrial production grew 11.9 percent in August mainly due to a low-base effect and good performance by manufacturing, mining and power sectors that surpassed the pre-COVID level.
  • IMF retained India’s growth outlook for both the current and the next fiscal. It pegs India’s real GDP growth at 9.5 percent for FY22, 8.5 percent for FY23, and 6.1 percent by FY27.
• Government removed restrictions on domestic flight capacity and will now be allowed to operate at full capacity from October 18. The decision to ease the norms was taken after reviewing the current air travel demand.
• RBI kept repo and reverse repo rates unchanged at 4 per cent and 3.35 per cent, respectively. The central bank also retained the GDP growth forecast at 9.5 per cent for the FY22.
• The RBI Governor said that with the worst of the second wave behind us and substantial pick-up in COVID-19 vaccination giving greater confidence to open up and normalise economic activity, the recovery of the Indian economy is gaining traction. He also cautioned about the elevated global crude oil, other commodity prices, combined with acute shortage of key industrial components and high logistics costs, are adding to input cost pressures.
• Buying was seen in auto, metal, energy and banking sectors. Strong business preview numbers and favourable credit growth data ahead of 2QFY22 numbers boosted the morale further.
• US market started the week in red due to worries about surging energy prices, jammed-up supply chains and companies failing to pass on higher costs to consumers. However, better than expected quarterly earnings reports from Wall Street banks and iPhone chipmaker Taiwan Semiconductor Manufacturing Company lifted the mood.
• The foreign institutional investors (FII) bought equities worth of Rs 10,380 mn, while domestic institutional investors (DIIs) sold equities worth of Rs 32,950 mn.

Things to watch out for next week

• The quarterly earnings season will gain momentum next week as the domestic market awaits September quarter results. With the expectation of a strong recovery in corporate earnings, banking will be the key sector under focus in the coming days.
• The US will announce its crude oil inventories, which is likely to impact the global crude supplies and India’s import bill.
• Also, the initial jobless claims, US goods and services manufacturing purchasing managers’ index (PMI) would be on the radar of market participants, guiding the future course of action.

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