Indian stock markets opened higher on Monday, mirroring gains in global equities and shrugging off last week’s sharp declines. The benchmark Sensex opened at 81,926.99, up from its previous close of 81,688.45, while the Nifty50 began trading at 25,084.10, higher than Friday’s close of 25,014.60.

The positive start comes after a tumultuous week that saw the Nifty fall 4.45%, its worst performance in over two years. The rebound is largely attributed to strong US jobs data, which eased recession fears and bolstered hopes for a soft landing in the world’s largest economy.

“US stocks rallied Friday on fresh signs of a strong labour market, with the Dow Jones Industrial Average ending at a record peak while the bond market cut back recession fears,” said Deepak Jasani, Head of Retail Research at HDFC Securities.

Investors are now turning their attention to the Reserve Bank of India’s Monetary Policy Committee meeting, scheduled from October 7 to 9, with the outcome to be announced on Wednesday. The central bank is widely expected to keep the benchmark repo rate unchanged at 6.5% for the ninth consecutive meeting.

“The RBI is expected to keep the benchmark repo rate unchanged in its upcoming policy review, having maintained it at 6.5% for the ninth consecutive meeting in August 2024,” noted Pravesh Gour, Senior Technical Analyst at Swastika Investmart Ltd.

The market is also bracing for the start of the Q2 earnings season, with TCS set to report its results on Thursday. Other companies like Tata Elxsi, DMart, and IREDA are also slated to announce their quarterly numbers this week.

Foreign Institutional Investors (FIIs) continued their selling spree, offloading shares worth ₹9,896.95 crore on October 4, while Domestic Institutional Investors (DIIs) bought equities worth ₹8,905 crore on the same day.

Sector-wise, IT stocks are in focus ahead of TCS’s results, while banking stocks are garnering attention before the RBI policy announcement. Real estate stocks are expected to recover following positive Q2 updates from major players.

“IT stocks will be in focus ahead of TCS’s Q2 results, set to be announced on Thursday. Real estate stocks are expected to recover following impressive Q2 updates from Godrej Properties and Macrotech Developers,” said Vikas Jain, Head of Research at Reliance Securities.

In early trading, top gainers on the NSE included Trent (1.71%), ITC (1.70%), Kotak Mahindra (1.15%), HCL Tech (1.07%), and HDFC Life (1.05%). Conversely, top losers were Titan (-1.65%), Adani Ports (-0.99%), ONGC (-0.81%), Hindalco (-0.55%), and HDFC Bank (-0.55%).

The market sentiment remains cautiously optimistic, with several analysts pointing to potential buying opportunities despite ongoing geopolitical tensions and volatile crude oil prices.

“Nevertheless, this correction may provide a solid buying opportunity given the strong domestic fundamentals and the anticipation of favorable Q2 results,” Jain added.

However, experts warn of potential volatility due to global factors. “Cross currents on strong equity cues from Wall Street against rising triplets; USD index, crude and US 10 year yields may dominate trade set up for the upcoming week on Dalal Street,” cautioned Vikram Kasat, Head - Advisory at PL Capital - Prabhudas Lilladher.

On the technical front, Nifty’s immediate support is seen at 25,000, followed by 24,900 and 24,750, while resistance levels are at 25,250 and 25,300.

As the week progresses, market participants will closely monitor global cues, especially developments in the Middle East, along with domestic factors such as the RBI policy outcome and corporate earnings reports.

Published on October 7, 2024