Buckle your seatbelts! Markets likely to keep investors on their toes

Despite recording a loss of 2.41 per cent in the last week, Nifty registered gains of 3.51 per cent for the month of October, aided by Bank Nifty, which rallied about 11.5 per cent and recorded its best monthly gains after April 2020. The start to the fresh month is likely to be on a bullish note as SGX Nifty is indicating that Nifty could open around the 11,689 levels, up by 54 points.

The three key catalysts for the positive start are 1) GST collection, which crossed the Rs 1 trillion mark in October for the first time in this fiscal year, indicating the trajectory of economic recovery. 2) Auto sales were struck particularly by the country’s largest passenger car marker, which marked a growth of 18.9 per cent in the total sales while Hyundai achieved the highest-ever domestics sales. 3) Cues from Asian counterparts.  

The market participants will also be seen reacting to the earnings of the blue-eyed boy of D-Street i.e. Reliance Industries as well as the private sector banking player, ICICI Bank.

We are stepping into one of the very crucial phases for the equity markets; the countdown has already begun for the US Presidential elections while the implementation of fresh lockdowns in some regions of Europe threatens economic growth. This has also resulted in uncertainty in the markets and it is quite evident from the fact that volatility is surging across the globe. Fear is taking over greed and this fear is likely to subsidise only after a concrete development of the Coronavirus vaccine and the outcome of the US Presidential election.

Over 60 companies are likely to report their earnings today including Cadila Healthcare, Escorts, HDFC, Pfizer, Ramco Cements, and Zee Entertainment.

It’s a sea of green for Asian equities on Monday despite a strong sell-off seen on Wall Street on Friday. Japan’s Nikkei 225 is leading the way as it has jumped 1.65 per cent, followed by Hong Kong’s Hang Seng, which has risen 1.06 per cent and China’s Shanghai Composite has added 0.47 per cent.

Volatility literally ruled the roost in Friday’s session as after opening on a flat note, the key benchmark indices slipped lower only to recover back from the day’s low and in the end, settled the day with modest losses.

Sensex and Nifty dropped 0.34 per cent and 0.24 per cent, respectively. The market breadth, indicating the overall health of the market, was slightly titled towards the advancers as 934 stocks advanced against 906 decliners. A divergent trend was seen in the broader indices wherein Nifty Mid-Cap gained 0.54 per cent, while Nifty Small-Cap lost 0.34 per cent. On the sectoral front, Nifty Realty, Nifty Metal, and Nifty Media were the top gainers while on the other hand, Nifty Auto and Nifty Private Bank were the top decliners.

The US stocks bid the final trading session of the month on a negative note as selling pressure in the tech giants and a surge in the Coronavirus cases, triggering fears of another lockdown, weighed on investors’ sentiments. Big tech names such as Facebook, Apple, Amazon and Netflix had a rough day and as a result, the tech-heavy Nasdaq plunged 2.5 per cent and ended below the important psychological 11,000 mark. While S&P 500 ended lower by 1.2 per cent, Dow ended with a loss of over half a per cent.

Meanwhile, the economic data continued to be impressive as personal income rebounded by more than expected and personal spending surged ahead of the estimates. Further, consumer sentiments revised higher. On the other hand, European stocks ended the day on a mixed note as a four-week lockdown was imposed across England starting from Thursday; however, a better-than-expected Eurozone Q3 GDP helped to limit the markets’ decline.