Nifty to climb higher or will bears come hunting again? Key things to know before opening bell

After starting October on strong note, S&P BSE Sensex and NSE Nifty 50, will look to carry that momentum on. On Thursday, Sensex surged 629 points or 1.65% on Thursday while the 50-stock Nifty managed to breach the resistance levels and close at 11,416 points. “A long bull candle was formed with gap up opening and the opening upside gap remains unfilled. This pattern indicates an upside breakout of the range movement,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities. Analysts believe that the positive trend in equity markets might continue for a few days. 

Adding to the positive momentum would be SGX Nifty which was trading 70 points higher during the early morning trade. “Despite continued FII selling, the Nifty gained almost 3% last week. Weekly settlement saw sharp short covering among banking heavyweights, which led Bank Nifty towards 22000. Going ahead, we expect the Nifty to consolidate with a positive bias with support around 11200,” said Raj Deepak Singh, Head – F&O, ICICI direct. He added that for the coming weeks no major Call option positions are visible and maximum writing is seen at 11200 and 11300 strikes suggesting immediate support for the index. “The relative Call option positions are visible at the 11500 strike above which the Nifty may attempt to test its previous highs of 11800,” he added.

Global markets: Asian stock markets were trading with gains on Monday morning. KOSPI and KOSDAQ were inching higher in the green while in Japan the Nikkei 225 was up 1.34% while the TOPIC was surging 1.86%. Chinese stock markets were closed.

Interest waiver case: The Supreme Court will today hear the moratorium interest waiver case. In the same matter, the center on Saturday agreed in the Supreme Court to waive compound interest on their loans of up to Rs 2 crore for the six-month (March-August) moratorium period. “On Monday, 11460 and 11450 would be major hurdles for the Nifty 50 index, however, the outcome from the Supreme Court on the interest waiver would decide the broader trend for the market,” said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.

TCS Buy-back: Information Technology giant TCS will consider an equity share buyback at its Board Meeting on Wednesday along with the results of the previous quarter. Analysts believe this will move the IT sector stocks that have been surging and are hot favourites ahead of the quarterly results where IT firms are expected to report strong numbers. 

FII and DII trends: On Thursday, Foreing Institutional Investors (FII) and Domestic Institutional Investors (DII) were both net buyers of equity. FIIs pumped in Rs 1,632 crore while DIIs bought shares worth Rs 259 crore. FIIs also bought index futures and index options worth Rs 1,476 crore and Rs 3,377 crore, respectively.

IPO Watch: The IPO market has not run dry for this week but will continue to jog with Likhitha Infrastructure’s issue extended till October 7. So far the issue has been subscribed 8.43 times but Qualified Institutional Buyers (QIB) have not yet subscribed even half their portion while the other two categories are oversubscribed.