Markets stable on positive bias

Under the shadow of the impending US Presidential election and possible consequential global market dynamics, final leg of Q2 earnings and continued FII selling; the domestic stock markets ended modestly higher for the week ended. Factoring the closings on the Muhurat day (November 1), both the benchmark indices NSE Nifty and BSE Sensex closed positively higher by one per cent at 24,304 and 79,724 respectively. On the back of resilience in several frontline counters, the broader markets also remained stable with positive bias. Buoyed by festival demand, GST collection shot up to ₹1.87 trillion in October, the second highest reported so far since the new indirect tax regime was introduced in 2017. The improvement in GST collection due to festival demand was expected by policy makers, who are optimistic about continued improvements in rural consumption.

The US Federal Reserve’s policy meeting on November 7, following the November 5 presidential election, is expected to impact global equity markets significantly. A Fed rate cut could influence the Reserve Bank of India (RBI) to consider easing rates, boosting sentiment in Indian equities.

IPO Corner: After a small lull in the previous fortnight, the primary market will see a lot of action next week starting from November 4 as four big IPOs will hit market, including the much-awaited Swiggy IPO from the mainboard segment.

F&O/ SECTOR WATCH

Mirroring the volatility in cash market, derivatives segment witnessed a brisk trading during the settlement week. The IT and Auto sectors were the biggest losers, whereas PSU banks and Media stocks saw a rebound, emerging as the major gainers for the week. In the options market, the highest Call Open Interest for the Nifty was seen at the 24,500 and 24,300 strikes, while the highest Put Open Interest was at the 24,200 and 24,000 strikes. For Bank Nifty, the prominent Call Open Interest was seen at the 52,000 strike, whereas notable Put Open Interest at the 51,500 strike. More option writing was seen in Call options compared to Put options indicating selling pressure on every bounce. Implied Volatility (IV) for Nifty’s Call options settled at 14.72 per cent, while Put options conclude at 15.22 per cent. The India VIX, a key market volatility indicator, closed the week at 15.51 per cent. The Put-Call Ratio of Open Interest (PCR OI) for the week was 1.34. Chartists indicate Nifty’s major support levels are at 24,000 and 23,800, with key resistance at 24,500. Currently, Nifty is trading below its 100-day exponential moving average, and the next support at the 200 EMA stands at 23,500. The market is viewed as a ‘sell on rise’ scenario as long as it remains below the 24,500 level.

Stock futures looking good Bharat Forge, Coromandel International, Federal Bank, Oberoi Realty, Ramco Cements and Marico.

(The author is a senior maket analyst and former vice- chairman, Andhra Pradesh State Planning Board)