The domestic equity markets are likely to remain sensitive in the immediate trading sessions owing to ongoing foreign fund outflows and the commencement of the corporate results season. According to analysts at Religare Broking, volatility is expected to continue as investor focus shifts between international and domestic developments.
Over the past week, the benchmarks witnessed mixed trend closing marginally higher after recovering from losses earlier in the period. Sectorally, metals, realty and banking stocks performed well while IT shares underperformed with heavy declines. The broader market indices outshined the main boards supported by value buying in small caps.
Looking ahead, the key factors that will influence investor sentiment include the US midterm elections scheduled for November 5th along with the Federal Reserve’s policy meeting decision due on November 8th. Domestically, the quarterly financial performance of prominent firms such as Dr Reddy’s, Titan, Tata Steel, Mahindra & Mahindra, Tata Motors and Asian Paints will be keenly monitored. Important macroeconomic data points covering manufacturing and services PMI are also on the anvil.
The Nifty index is currently caught in a range of 24,000 to 24,500 levels. Any decisive break above or below this band will likely determine the short-term trend. While upside momentum could lift the 50-stock index towards 24,800, weakness below 24,000 may weigh on the recovery. Traders are advised to follow stock-specific opportunities and diversify their portfolios in the midst of sector-specific rotations.
