Stock Market Outlook: Bourses may extend gains on cues; dark horse gallops on street

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By S Jha

New Delhi, October 11: Indices may firmly open in the green, tracking global cues as the US bourses ended the day with gains on the back of moderating bond yields. The Dow Jones futures is slightly down, and the Brent crude oil price is marginally up. Yet, the twin factors may not stop the bulls from further extending the hold on the street as Nifty is seen to be edging up with timing for big bang quarterly results.

Nifty is a kiss away from the 19700 level and a breakout above the trading range as per chartists could bring in the element of short-covering. Yet, the bears may wish to keep the indices in their trading range as Bank Nifty weekly option expiry is today, while for Nifty it will be tomorrow.

Nifty nicely made gains yesterday as the crude oil price failed to show sharp rise. Crude oil is still trading at close to $88 per barrel. Bond yields in the US are also moderating. Yet, Indian bourses continue to face the risk of the fund houses shifting their focus to China as Beijing aggressively seeks to pump prime the economy to achieve the five per cent economic growth in the current fiscal.

Yet, the Indian GDP growth upgrade to 6.3 per cent by the IMF may further bring cheers to the bulls on the street also for the fact that the inflation projection by the economists is now concurring for declining trajectory. The strength in the Bank Nifty because of the two laggards – Kotak Mahindra Bank and ICICI Bank – showing momentum after a gap of several months could cheer up the bulls. It may be noted that the ICICI bank and HDFC Bank together account for 60 per cent weightage in the Bank Nifty index, besides also being among the major contributors for Nifty.

The realty sector has truly been a dark horse on the street, with the leading names now trading at multi-year peak. The likes of Sobha, Prestige, Brigade, and DLF are now trading at the peak of several years. The market participants maintain that there is a massive appetite for realty projects, and super luxury apartments are now buzzing with sale.