Stock Market: Outlook for week remains cautious; global cues mixed as RBI brainstorms rate trajectory

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By S Jha

New Delhi, October 2: Even while Nifty reclaimed 19600 level after shrugging off the foreign fund-led selloffs in the bourses, the truncated week is likely to be sideways amid mixed cues. The bond yield in the US is literally on fire, while the dollar stays firm.

The monetary policy committee of the Reserve Bank of India begins deliberations from Wednesday on the fate of the Repo Rate even while the consensus view on the street is that the pause button will play out. The RBI, as per commentators, may not press the button to hike the rate as macroeconomic indicators are not looking bullish and the growth figures are likely to come under pressure in the second half of the current fiscal.

Also, the rising crude oil price is threatening to disturb the fiscal math of the Narendra Modi-led government at the Centre in an election year. With cues set largely on the bearish side, the market, which gained firmly in the Friday session, is expected to stay cautious and wait for the clarity. Additionally, the US Fed commentary is also expected this week.

The data of the sales of cars came over the weekend with the outlook for the automobile sector remaining bullish. Mahindra and Mahindra has reported better sales number in September. Maruti also remains strong with bullish demands for its new offerings. But most bullish had been Hyundai and MG, which recorded extremely high rate of sales in the September month. Scrips of the carmakers are likely to react to the September sales data. It may be noted that Maruti and Tata Motors were firmly trading in the Friday session.

Even while the indices corrected in the September series, the PSUs remain the market favourite, as they refuse to lose grounds. The market participants are sounding bullish on a few of the PSU stocks such as Bhel, Punjab and National Bank, Canara Bank, Bharat Electronics, railways stocks, and others. Avantel from the space sector has been buzzing, and the scrip is likely to be on the radar of the investors in the remaining sessions of the week.