Positive Earnings – The Key To Uptrend

Bloodbath In D-Street Wiped Out All 2018 Gains As RBI Hold Rates At 6.5%

Our Analysis

This week was a roller coaster ride for the market which proved the indigenous nature of the market. A see-saw run of Banknifty was among the major forces driving the market this week. During the whole week, bulls & bears kept investors clueless, and market indecisive and unpredictable.

Q2 earning session started with disappointing results from heavyweight INDUSINDBK & TCS. Looking at the past quarter, this seems to be a point of worry for the investors as they can imagine the worst outcomes ahead as they witnessed in the earlier quarter. Moreover, the government's decision to raise the dearness allowance from 5 to 17 percent, along with, the drop in the unemployment rate (CMIE report) had added a buzz on the street.

In the upcoming period, earnings would remain major trigger for the Indian market. Technically, the Nifty bounced from the levels of 11,080 this week, as we mentioned in our last week's commentary, the levels will still play an important support. However, the close above 11,340 would take nifty to 11,450 levels. The ace of card would be the BankNifty, which would construct the future trend.

This Weeks Market Highlights:

Benchmark Indices:

1)On Monday, In the last hour, the Indian equity market faced the selling pressure, Extending the decline for the 6th consecutive day. Sensex closed 141 points, or 0.38 percent, down at 37,531.98, While, The Nifty index settled 48 points, or 0.43 percent, lower at 11,126.40.

2) On Wednesday, It was an extraordinary performance by the banking and the financial stock in the last half of the trading session. Observing today's action on the d-street, we can surely say that the bulls had awakened after a week-long correction and outlook for the coming day seems quite bullish. In the closing, The Sensex settled 645 points higher at 38,177 while the Nifty surged 1.7% to 11,313.

3) On Thursday, Sensex fell by 0.78 percent to close at 37,880 and the Nifty 50 declined 0.7 percent to end at 11,234.55. Nothing surprising in the broader market as the mid & small-cap declined by 1.16 & 0.47 respectively.

4) On Friday, Indian equity benchmarks opened higher, in line with Asian peers.

Broader Index & Global Market:

-Globally, there was a mixed performance amid the ongoing trade war tension which created a roller coaster ride throughout the globe.

- The broader space had been trading mixed with market breadth remain in bullish, however, the stock-specific action continued to build-up and sector like insurance, cement, paints, chemical likely to create buzz.

Movers & Shakers

Shares of BHARTIARTL surged more than 12 percent after Reliance Jio said it will end free voice calls on its network benefiting the Airtel and the other telecommunication company.

Shares of IBULHSGFIN dropped more than 24 percent in a week after Reserve Bank of India rejected its merger with Lakshmi Vilas Bank.

Key Market Drivers

  • US-North Korea talks stalled.
  • Budgetary exercise to start from October 14.
  • Feds Powell says US expansion is sustainable

Event Watch

International:

  • China Trade Balance
  • China CPI YoY
  • China Industrial prod YoY

Domestic:

  • Crude price
  • INR Price
  • Q2 Results

Stocks To Watch

ACE & RITES On Upside while, CHENNPETRO & INDIGO on Downside.