Stock Market Outlook: Bulls bet on local cues & bears set sight on hot US inflation

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By S Jha

New Delhi, October 13: From Saturday, the festive season will kick in as the Durga Puja celebrations begin with Navratari festivity in markets gripping with offers for consumers. Indices are poised at comfortable levels to rise further in line with the bullish momentum even while the IT heavyweights – TCS, Infosys and HCL technology – have lived up to the expectations that the sector is still battling recessionary sentiments.

The Dow Jones Futures is marginally up, while the GIFT Nifty has cut its losses in the early session on Friday. The bond yields for various tenures for India, as well as the US, are declining. The dollar index is also cooling off. The crude oil is in a consolidation stage, trading at about $86 per barrel.

Overall the macro-indicators offer comforts to the bulls, who will further be enthused with the consumer price index coming at five per cent against the street expectation of 5.5 per cent. But the hot US data brings in the fear factor of the Federal Reserve staying more hawkish. The street has already factored in one more rate hike by the Fed.

The market participants are hopeful that the indices would see through the initial jerks to be given by the US hot data, as well as disappointment from the IT trinity on Friday. Bearish sentiments will gain strength from the cut in the revenue guidance given by Infosys, while the large size client acquisition may fail to enthuse the bulls.

Reliance Industries has been back on a positive trajectory for the last two days. The heavyweight may give stability to the market because of its weightage. Also, the private banks such as Kotak Mahindra Bank, Axis Bank, and others are showing signs of strength.

The auto stocks have been seen to be bullish, which could again provide cushion to the market. Maruti, reacting to the reports of the company aiming to triple export size, was trending on Thursday. The scrip had retraced from the level of Rs 10735, and it is now again climbing towards Rs 10600 level. The two-wheeler stocks such as Bajaj Auto, and others are also showing strength on the street.