MUMBAI: Concerns regarding rising crude oil, yield and gold prices, coupled with the pessimistic sentiment stemming from the Israel-Gaza conflict and geopolitical tensions, have sent the Dow Jones into a turbulent period.
US Federal Reserve Chairman Jerome Powell’s dovish statement has contributed to these worries.
The US 10-year Bond Yield recently reached a 16-year high, standing at an alarming 5 per cent, further adding to the apprehension, while surging geopolitical tensions in the Gulf region have compounded the uncertainty.
Despite these global challenges, the Indian stock market is expected to perform steadily.
Domestic equities have been grappling with selling pressure for the third consecutive day, mainly due to weak global cues, the Israel war, rising yields, and soaring prices of crude oil and gold.
The broad market, including Nifty mid and small-cap 100 indices, experienced a 1 per cent and 0.8 per cent decline, respectively.
The upcoming earnings season, set to gain momentum in the coming week, is anticipated to dictate the market’s direction, alongside global cues. The banking sector will be a significant focus on October 23 (Monday) as investors react to the Q2 results of ICICI and Kotak Bank, which will be announced over the coming weekend.
From a technical perspective, the Nifty formed a Doji candle and an Inside Bar on the daily frame.
It has also been forming lower highs for the last three sessions and a Bearish candle on the weekly frame. Although it gave up gains from the previous week, it is still forming higher lows from the past two weeks.
Varun Aggarwal, founder and managing director, Profit Idea, said, “Until it holds below 19,550 zones, there is potential for weakness towards 19,442 and then 19,333 zones. Resistance levels stand at 19,650 and 19,750 zones”.
“The tensions in the Gaza Strip are expected to be temporary and should not significantly impact medium to long-term investors. These investors can view this correction as an opportunity to acquire high-quality stocks from weaker hands”, said Aggarwal.
“The Indian equities’ medium to long-term story remains intact despite global concerns, as the Indian consumption story continues to be robust. Investors are encouraged to focus on selected stocks and invest while ignoring market noise”, he added. Additionally, potential investment opportunities can be found in the realty and infra sectors, as well as selected stocks from IT, metals, media, petrochemicals, and the banking sector.
The major support for the bulls on the index remains at 18,887, while the open interest data suggests support shifting to 19,000-19,300 put option levels. As Warren Buffet advises, “Be greedy when others are fearful and be fearful when others are greedy,” indicating that one should consider quality investments for the long term. (ANI)
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