Mid And Small Caps Are About To Outshine

Our Analysis

Indian market showcased a powerpack performance this week. After a long time, the broader indices outperformed which was the joyous event for the investors. The positive global cues, the expectation of the GST rate cut in major sectors backed this rally. The IIP growth coupled with the inflation which was at the comfort level which kept negativity out of the D-street. Moreover, the crude on the declining side, since the demand growth was cut by the OPEC, along with the INR strengthening added the sentimental boost among the investors.

5-day rally of frontline indices halted by the profit-booking that has emerged on the weekly expiry day. The sectoral analysis shows the strength in the Auto & Reality stock. Mid & Small -Cap space has given a clear breakout which is expected to outperform the benchmark indices going ahead.

The festival season is on the line and revival is expected in some of the selected sectors, where a stock-specific approach is recommended to gain from this momentum. On the options front maximum Put OI is at 10800 followed by 10600 strikes, while maximum Call OI is at 11000 followed by 11200 strike in September series.

This Weeks Market Highlights:

Benchmark Indices:

1) On Monday, the Indian share market had a strong closing in today's trade. It's been witnessing that d-street had the upper hand of the bulls in the short run as well as there are positive global clues from the global market which are supporting the sentiments. On the sectoral front, the banking and auto stock had led its way, While, IT was the only sector that had disappointed throughout the day. The Sensex grew by 163.68 points at 37,145.45 and the Nifty50 rose 56.80 points to 11,003.

2) On Wednesday, Fifth-straight day in a row for the Indian share market to close on a higher note. the Sensex was up by 125.37 points at 37,270.82, while Nifty grew by 32.70 points at 11,035.70. The move of today was supported by the Auto and the Metal stock, Which are in the strong bullish momentum from the start of the week, however, the IT pack continued to slip lower, Headed by the strengthening of INR.

3) On Thursday, Benchmark indices after a sharp rally from 10,750 levels witnessed a profit booking in today's trading session. The weekly expiry day along with the major resistance emerged a selling pressure in the bourse. Among all, Reliance was the biggest setback, which dragged the Nifty below the 11,000 marks. Overall, Sensex was down 166.54 points at 37,104.28 and the Nifty fell 52.90 points to 10,982.80.

4) On Friday, Indian equity benchmarks fluctuated in opening trade.

Broader Index & Global Market:

-The global market traded mixed over this week, Dow posts 7-day winning streak, inches closer to a record high, As President Donald Trump agreed on Wednesday to delay an additional rise in duties on Chinas goods by two weeks. The move increased optimism in trade frictions between the worlds two largest economies.

- In the broader market, The mid & small-cap outperformed the benchmark indices with the auto, metal indices outperformed, The IT stock continued the weakness this week, however, the paper stock was on focus as modiji ban the single-use plastic benefited the paper industry. Thus, A heavy buying was seen with that, the footwear industry had also gained on the expectation of the GST rate cut which was scheduled on 20th September.

Movers & Shakers

Shares of JK PAPER surged more than 18 percent, After Prime Minister Narendra Modi, is set to launch the campaign with a ban on plastic bags, cups, and straws on October 2, which is most likely to benefit the paper industry.

Shares of RELIANCE NIPPON dropped more than 7 percent in a week after the company informed the exchanges that it would sell up to 3.15 percent of equity shares for over Rs 505 crore on stock exchanges through 'Offer for Sale' route on September 11 and 12.

Key Market Drivers

• Oil rises as Saudi Arabia signal OPEC cut to continue
• FM Sitharaman's explanation for the auto slowdown: Millennials prefer Ola, Uber.
• RBI flags frauds, asks banks to evaluate transitory account dealings: Report.
• OPEC cuts 2020 oil demand forecast, urges effort to avert new glut.
• Hong Kong Stock Exchange looks to acquire LSE for 32bn

Event Watch

International:

• FOMC Rate Decision
• US Industrial Prod MoM
• China Industrial Prod YoY

Domestic:

• Crude price
• INR Price
• India Wholesale Prices YoY

Stocks To Watch

TECHM & BAJAJAUTO On Upside while, WIPRO & ASIANPAINT on Downside.