Stock market outlook suggests ‘world is flat’ overhang on street
US President Joe Biden was briefed by national security team on the latest updates in the wake of Hamas’s abhorrent attack in Israel and the worsening humanitarian crisis in Gaza.
By S Jha
New Delhi, October 18: The US indices closed in the green in the Tuesday session, extending their gains, with technical indicators terming them to be in bullish zones. The Asian indices are trading flat with minor negative biases. Indian indices are also likely to open with minor cuts and pick up the direction afterwards.
Top red flag for the Indian equity market has conventionally been the prices of crude oil. The bulls may have to worry because crude oil prices have spiked by almost two per cent. Also, US President Joe Biden is visiting Israel today in the backdrop of Secretary of State Antony Blinken failing to get the Arab World on the side of Tel Aviv to bomb out the Hamas in Gaza. The geo-strategic overhang may also drag the indices.
The bond yields, both in India and the US, are in the flat zone, which should be a relief for the bulls. The dollar index is also flat. Dow Jones Futures is trading with a minor cut.
The chartists claim to have plotted the Nifty range between 19450 and 19850. Nifty in the Tuesday session almost challenged the upper range to retrace in the midsession and closed with positive momentum. The bulls may count on the closing with positive momentum for the Nifty to once more challenge the upper side of the trading range.
Prime Minister Narendra Modi’s unveiling of the maritime vision and the accompanying commentary on India-Middle East-Europe Economic Corridor while outlining the potential of several billions of dollars may entice the bulls to chase a select stocks such as shipbuilders, railway PSUs, and construction companies. At the same time, the power sector has clearly been the winner on the street for at least a year, and positive momentum has been seen in counters such as NTPC, Powergrid, REC, Power Finance, and several other mid and smallcaps from the sector.
The IT sector is defying the bearish quarterly result commentary and HCL technology and Birlasoft are seen on the basis of their price action in firm bullish momentum while the likes of Infosys, Tech Mahindra and others are trying to turn positive. The financial analysts were seen pulling their hairs over the numbers put out by the HDFC Bank, which arrested the momentum in the Bank Nifty yesterday. The full impact of the understanding of the result may be seen in today’s action, which is also a weekly expiry of Bank Nifty.
(Disclaimer: Investors must consult SEBI-registered advisors before making any investment decisions).
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