Investors look to clear cues

Absorbing mild shocks triggered by weak commentary and earnings from IT majors and the geo-political tensions from Israel-Hamas conflict; the domestic stock market rebounded smartly from lows of the week and clocked half a percent gains amid consolidation for the week ended. Fall in CPI inflation, healthy industrial productionand expectations of good Q2 earnings have kept the sentiment positive. NSE Nifty inched up 100 points to 19,751, and BSE Sensex rose 287 points to 66,283 points. In line with benchmark indices, in the broader market the Nifty Midcap and Smallcap indices also gained around half a percent each. Elevated US bond yields continued to impact the FII flows as they remained net sellers in India for the third consecutive month. FIIs net sold Rs2,200 crore worth of shares in the cash segment last week, taking the total current month outflow to Rs10,600 crore, though DIIs managed to offset to a large extent by buying nearly Rs8,400 crore worth shares during the month.

The speech in next week by the US Fed Chairman Jerome Powell will also be an important factor to focus on, as Fed is still in favour of one more rate hike by the end of 2023, indicating higher rates for a longer time to fight inflation. Market participants would closely monitor the Q2 earnings season which has high expectations from like sectors Auto, Finance and Oil & Gas. In the primary market next week, Gujarat-based gas distribution company IRM Energy will open its Rs545-crore IPO on October 18 and close on October 20, with a price band of Rs480-505 per share.

F&O / SECTOR WATCH

Amid sector and stock-specific action, the derivatives segment exhibited mixed performance over the past week. NSE Nifty recorded a modest 0.5 per cent gain, while the Bank Nifty experienced a slight 0.16 per cent loss. As per the weekly options data, the maximum Call Open Interest was seen at 19,800 strike, followed by 19,900 & 20,000 strikes; maximum Put Open Interest was at 19,700 strike, followed by 19,000 & 19,600 strikes. For the Bank Nifty, the highest Call Open Interest was observed at strikes 44,500 and 44,600 whereas the highest Put Open Interest was concentrated at strike 44,000 points. In terms of Implied Volatility (IV), Call options for Nifty settled at 9.83 per cent, while for Put options concluded at 10.43 per cent.

(The author is a senior maket analyst and former vice- chairman, Andhra Pradesh State Planning Board)