Indian markets will be closed on Wednesday on the occasion of Dussehra celebrations across the country. In the last trading session, both the benchmark Sensex and Nifty 50 climbed more than 2% as investors prepare for the second quarter earnings season for FY23. The markets will resume their trading on Thursday and the performance to track global cues. However, the near-term structure of the market looks positive and experts recommended buying an intraday correction while selling rallies to traders.

On Tuesday, markets saw a rally led by broad-based buying across sector indices. Banking, capital goods, metals, and IT stocks were the top performers. Midcap and small cap also climbed significantly. The Indian currency appreciated, and the inflow of foreign funds also gained traction. Overall, the outlook for global equity markets was positive along with a decline in bond yields, a rise in crude oil prices, and a pullback in the dollar index.

Sensex ended at 58,065.47 up 1,276.66 points or 2.25%. While Nifty 50 gained 386.95 points or 2.29% to close at 17,274.30.

The Indian rupee appreciated against the American currency to close at 81.52 per dollar on Tuesday at the interbank forex market. While the inflow of foreign investors (FII) funds was picked up to 1,344.63 crore cumulatively in the equity market on October 4 — higher than inflows of 590.58 crore on 3 October.

Mitul Shah – Head of Research at Reliance Securities said, “The market experienced heavy losses for the first nine months of the year as central bank officials are more clear that interest rate hikes and monetary tightening will continue.”

Shah added, “Markets are awaiting the 2QFY23 earnings results for further cues, which will start next week. Central banks around the world are in the midst of an inflationary firefight as many are raising their policy rates to fast. The RBI raised its key repo rate by 50. bps to prevent rising inflation RBI may have to keep up with the tightening of monetary policy and another rate hike of 35 bps is expected in December 22. All India likely to avoid recession as US and Europe move towards market. positive response to commentary on India’s growth impulses and forecast of 7% GDP growth with 6.7% inflation for FY23.”

All eyes are set on TCS Q2 earnings scheduled for October 10. IT stocks will be in focus due to their quarterly results. Peers HCL Tech and Wipro will announce their Q2 financial performance on October 12, while Infosys and Mindtree are scheduled to announce Q2 results on October 13.

Among the automobiles, the keenly watched Bajaj Auto Q2 results will be announced on October 14. In the banking sector, HDFC Bank’s Q2 earnings are expected to be presented on October 15.

Accordingly, other companies will announce their Q2 in the coming days.

On Nifty 50, Rupak De, Senior Technical Analyst at LKP Securities said, “Nifty has moved higher following a consolidation on the daily chart which suggests an optimistic rise among market participants. The index is positioned above 200DMA, which is a bullish setup. The momentum indicator has entered a bullish crossover. The short-term trend looks positive. A decisive move above 17300 could fuel a strong market rally. On the downside, support at 17090; resistance on the higher side seen at 17600/17725.”

The near term outlook of the markets is optimistic. Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities, said, “The short-term market structure is positive but due to temporary overbought we may see limited range action in the near future. For the traders now, 17200-17150/ 57800-57600 would be the main support zone whereas 17400-17425/58300-58400 would act as an important resistance zone for Nifty. Buying on intraday correction and selling on rallies would be an ideal strategy for the day traders.”

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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