Last week, on Friday, Sensex closed at 57,426.92 higher by 1,016.96 points or 1.80%. Nifty 50 ended at 17,094.35 up 276.25 points or 1.64%. Heavyweights such as Reliance Industries, Bajaj Finance, Bajaj Finserv, HDFC Bank, Bharti Airtel, HDFC, Maruti Suzuki, and ICICI Bank contributed to the performance.

Banking stocks emerged as top bulls, while consumer durables, autos, metals, capital goods and financial stocks also added to the gain. In the broader markets, the Midcap and Small cap indices rose over 1% each.

At the interbank forex market, the Indian rupee settled at 81.40 per US dollar on Friday up 33 paise from the previous close of 81.73 per dollar. Meanwhile, outflow of funds by foreign investors (FIIs) slowed to 1,565.31 crore by the end of September 30 as against the outflow of 3,599.42 crore on 29 September. Last week, FIIs did their sharpest selling in the equity market for the month of September.

Ahead of the RBI policy day, Indian markets were under selling pressure for seven consecutive days. Sensex and Nifty 50 gained more than 5.5% each between September 21 to September 29 before climbing nearly 2% each on September 30.

In the September 2022 policy, RBI increased the repo rate by 50 basis points, making it 5.9%. As a result, the fixed deposit facility (SDF) rate has been adjusted to 5.65%, and the marginal fixed facility (MSF) rate and the Bank Rate at 6.15%.

With the latest hike, RBI has now raised the key repo rate for the fourth time in a row. So far in the current fiscal, the repo rate has increased by 190 basis points.

The six-member MPC also decided to remain focused on withdrawing accommodation to ensure inflation remains within target going forward and supporting growth.

RBI has projected CPI inflation at 6.7% for the current fiscal, while real GDP growth is projected at 7% by the end of FY23.

What’s on offer from markets between 3-7 October?

Vinod Nair, Head of Research at Geojit Financial Services said, “The Fed’s hawkish approach to taming inflation through aggressive interest rate hikes has been unfortunate for the domestic market bulls. While the domestic economy has been buoyed by solid fundamentals, the stock market’s appetite for risk has. It is hampered by growing concerns of a global recession As the 10-year yield spread between India and the US has fallen to record lows in recent years, foreign investors have started to exit the Indian market. safe haven option, the rupee has been forced to trade at record lows.Domestic investors are turning to IT and pharmaceutical companies, which have been in a consolidation phase for the past year and are now benefiting from the depreciation of the INR.

However, Nair said, “an inline rate hike coupled with the RBI’s confidence in the economy’s growth momentum helped the domestic market reverse the losing streak. 7.0% shows the resilience of the Indian economy”

According to Apurva Sheth, Head of Market Perspectives, Samco Securities, with no major events expected in the following week, markets could be dominated by global news flows. US unemployment and domestic data such as manufacturing, deposits and loan growth could drive investor sentiment next week. The volatility in oil prices and the strengthening of the US Dollar against other currencies will be other important factors that could affect the market.

“Investors need to keep an eye on stock-specific news,” Sheth said.

On Nifty 50, Sheth said, “The Nifty came down by more than 1% for the week. It ended the week with a hammer candle, indicating that the short-term correction is likely to end. The daily RSI is also starting to recover from 40 levels, indicating that the uptrend may resume soon. In monthly expiration, writing calls near the 17,000 strikes indicates that this level is likely to act as a huge support. October is a bullish month for the markets based on seasonality. Since last October 10, 8 hours of deals have ended on a positive note. As a result, traders should look for buying opportunities.”

Disclaimer: The opinions and recommendations made above are the opinions of individual analysts or brokerage firms, and are not the opinions of Mint.

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