Today’s Market Summarised

Nifty closes the week in green but was unable to cross the all-time high.

Nifty opened the day with a big gap-up again at 17,891. The index was confused and went on to test the all-time high just after the first hour of trade. After trading in a 100-point zone through the day, Nifty closed the day at 17,895, up 104 points or 0.59% right near today’s opening level.

Bank Nifty opened the day at 37,938 with a gap-up and moved further up. For the 4th time in the last 3 weeks, the index found resistance at 38,100 and closed with a red candle. Bank Nifty closed the day at 37,775, up 22 points or 0.06%.

NIFTY IT(+1.96%) and NIFTY PSU Bank(+1.65%) closed in the green. NIFTY REALTY(-2.2%) saw some correction.

Almost all Asian markets are closed in the green today. European markets are all trading flat to red currently.

News Picks

Reliance(+3.8%) gave a breakout to all-time highs and closed as Nifty 50’s top-gainer. The company is expected to benefit well from the increased energy and gas prices and was underperforming other energy stocks. Reliance became the first Indian company to hit the market cap of Rs 18 lakh crores.

With TCS(+1.1%) results set to be published around 7 PM today, IT companies closed among the top-gainers. Wipro(+2.8%), Infosys(+1.9%), TechM(+1.6%), HCL Tech(+1.2%) and TCS(+1.1%) closed with gains.

Once again, all stocks in the IT industry closed in the green with midcaps MindTree(+4.5%), CoForge(+3.6%), LTI(+3.5%) and LTTS(+2%) gaining the most.

With reports that Private Equity group TPG is in talks with the Tata Group to invest $1 Billion(~Rs 7,400 crores) or more in the electric vehicles (EV) division of Tata Motors(+1.7%), shares of the company went up again. Yesterday, there was also news that Tata will take over Ford’s Chennai plant.

Tyre stocks once again closed mostly in the green. MRF(+5.6%), Apollo Tyres(+2.7%), JK Tyres(+1.9%), CEAT(+1.2%) and more closed in the green once again.

Bandhan Bank(+5.2%) continued its high volume breakout and closed in the green for the sixth straight trading session.

The usual suspects – BSE(+6.8%), IEX(+8.6%), CDSL(+4.7%) and MCX(+5.6%) together closed in the green.

With Futures contracts soon to be a reality in power, IEX and MCX gained. There was also a report that 100 coal-based power plants had coal stock for less than 5 days on Oct 6. 7,823 MW peak shortage was recorded on Oct 6 and energy demand met at 3,845 million units on Oct 6 which could cause more volume in the Indian Energy Exchange.

Caustic soda prices rose another 10% in China. Some chemical companies including Guj Alkali(+2.4%) closed with gains.

IRCTC(+3.9%) once again gained to fresh 52-week highs, while PEL fell more than 5% after yesterday’s jump.

Fertilizer stocks fell intraday but gained back sharply after the Govt of India said it won’t increase any subsidy in Diammonium phosphate & all phosphatic fertilizers.

Realty stocks including Godrej Properties(-4.7%), Sobha(-3.5%), Oberoi(-2.1%) and Pheonix(-2.4%) closed in the red after yesterday’s rally. Only Lodha(+3.6%) closed in the green from the realty index.

Markets Ahead

Data from AMFI on the mutual funds inflows for September is out. Equities saw inflows of Rs 6,456.4 crores vs Rs 8,057 crores in August, reducing for the last 2 months. However, there was a heavy Liquid Fund outflow at Rs 48,379 crores vs an outflow of Rs 714.1 crores last month, which indicates that there is a lot of people sitting with cash in the current market. And showing the power of retail investors, September SIP inflows stood at Rs 10,351 crores, crossing the Rs 10k crore for the first time.

Along with the mutual funds’ data, Reliance breakout and HDFC Bank trading just 2% away from its all-time high indicates a bullish market. Nifty found support at the 17,850 level that we have been watching, which is also around yesterday’s high. Bank Nifty will need a boost from HDFC Bank to cross over 38,000.

In general news, the Tata Group has taken over Air India for an enterprise value of Rs 18,000 crores, as said by the government. The deal was made for Rs 2,700 crores cash + taking over the Rs 15,300 crores debt of the airline which is returning to the Tata family after 68 years. This valuation may cause volatility in airline stocks, and is a pretty good deal for the Tatas. Will be good for PSU Banks that have loan exposure to the airline.

Hope you caught the easy rally in IT stocks today. Ahead of the Q2 results, the sector tends to rally usually.

October looks to be starting off with a bang, will have to wait and see if the all-time high is broken in Nifty by Monday, or if we will be back to the 17,500 levels. The RBI has also said that they are committed to bringing down inflation gradually, which the markets did like.

Did you have IT stocks in your portfolio? If yes, which one? Let us know in the comments of the marketfeed app!

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