The Nifty was up over 500 points last week. The Nifty broke the 11,800 resistance and rose to 11,935 on October 9. The market rallied behind August highs.
IT stocks were the main contributors to the surge. Leading IT stocks such as Wipro, TCS and Infosys rose more than 10 per cent last week. TCS’ excellent second quarter results also helped the market.
Banking stocks were the biggest losers in early September corrections. At the same time, banking stocks ended the week on a positive note. The Reserve Bank’s monetary policy review meeting took decisions that stimulated the financial markets, paving the way for the rise in banking stocks. The rise in equities in the banking sector, which has the highest weightage in the Nifty, was a driving force behind the market trend.
The market is now likely to move to a higher level than before COVID-19. After breaking the resistance of 11,800, there is now a small resistance at 12,000. Bank shares will play a crucial role in this move. Strong support from IT and pharma stocks is expected to continue in the market.
The Reserve Bank of India (RBI) has decided to keep interest rates unchanged at its monetary policy review meeting on Friday, but steps have been taken to increase liquidity. Interest rates remained unchanged due to high inflation. Measures to increase funding will help boost the economy during the epidemic.
The upcoming festive season is expected to help the market. The second-quarter results of companies will also be crucial. At the same time, any adverse movements in the US market will be reflected in the Indian market as well. With the presidential election looming in November, the US market is likely to move cautiously.
The next Nifty support level is 11,550. Breaking this level has strong support at 11,377. In general, the market is expected to move positively. But at the highest level investors need to be careful.
