Week Ending October 10th 2024

Dear patrons; after suffering heavy losses in the first week of October, markets consolidated in a tight range to end the second week slightly lower. Consistent selling by Foreign Institutional Investors led to the fall, although Domestic Institutions were buyers in the falling markets.

On geopolitical front, situation remains quite volatile between the fighting countries. Geopolitical tensions continue to keep crude oil on the boil. Crude approaching close to $ 80/barrel jeopardizes growth in emerging economies like India. Also, rising crude is likely to have an adverse impact on inflation, key driver in deciding interest rates for most of the Western World.

FIIs have remained sellers for last couple of weeks in Indian markets, as some drastic steps by the Chinese government on economic front is likely to result in better growth, making China a preferred investment destination for FIIs. We believe that this scenario is temporary and FIIs should return to Indian markets sooner than later.

In other news Corporate Income Tax in India rose more than 11% Y-o-Y to 494697 lakh and personal Income Tax rose by almost 23% to 598484 lakh. The rise in Income Tax collection is testimony to our belief that the Indian economy is in good shape and growing gradually, out pacing its peers.

October brings start of the Q2 results. Tata group giant TCS kicked off the result season on a somber note. We believe, it would be difficult for many corporates to repeat their performance this quarter. 

As is evident from the above pic, Nifty consolidated in a tight range for the week with a negative bias. Nifty faces hurdle in 25150-25300 range. 24700-24500 range should act as support for Nifty for the coming week. We expect markets to remain range bound and action to more stock specific. As long as Nifty remains below 25500 it is "Sell-On-Rise" market. A breakout above 25500 is needed for Nifty to move northwards.

BankNifty is trying hard to keep head above the very crucial 51000 level. It managed to close above this all-important level on all days after closing below 51000 Monday. BankNifty is likely to face resistance around 51600 and 52000 thereafter. A move above 52000 should make ground clear for BankNifty to move towards new highs.

As stated previously, we believe action to remain stock specific. Traders may focus towards stocks instead of indices. Waiting for a clear breakout or breakdown should prove to be most prudent strategy. In the mean identification of good quality stocks can be undertaken.

Investors should take opportunity to buy good quality stocks on every dip in the markets and stay Invested.

"Hastily taken decisions always result in heavy losses. Take your time before putting money in any stock." ~ Rakesh Jhunjhunwala

P.S.: This communication is for educational purpose only and does not recommend buying or selling any stock or index. Trade at your own risk.