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Retail enthusiasm keeps buying intact on D-St but caution seeps in ahead of Fed meet

NEW DELHI: Buying continued on Dalal Street on Tuesday as encouraging macro data gave hopes to investors that any negative news from central banks will be absorbed by the market momentum.

The retail and DII enthusiasm is getting fundamental support from positive economic data like record GST collections, PMI at 55.9 and better than expected Q2 results. An important event that can influence financial markets globally is the FOMC meet starting today, said an analyst.

“The Fed is widely expected to announce tapering its bond-buying program starting this month. More important than the tapering announcement, which is already discounted by markets, will be the Fed’s response to inflation and the likely cues on rate hikes. If indications of an earlier than expected rate hike comes from the FOMC meet, that can be negative for markets. Otherwise, markets may continue to be resilient,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

How are bluechips doing
After opening in the green, benchmark indices pared gains. At 9.31 am, BSE flagship Sensex was up 78 points or 0.13 per cent to 60,216. NSE benchmark Nifty advanced 41 points or 0.23 per cent to 17,970.

“The index has opened on a lethargic note but it is a positive sign that it is above 17,900. That is a crucial level to keep in mind. As long as it keeps above this there is always a possibility for positive momentum to build in and take the Nifty higher. A base has been formed around 17,550-17,600 but if that were to break, we could slide down to 17,200,” said Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments.

In the 50-share pack Nifty, Tata Motors was the biggest gainer, up 2.93 per cent. Maruti Suzuki, NTPC, Bajaj Finance, Titan, HDFC Life Insurance, Adani Ports and Power Grid were among other gainers.

Sun Pharma was the top loser in the pack, down 2.15 per cent. Tata Steel, Hindalco, HCL Tech, JSW Steel, Cipla, Dr Reddy’s Labs, ONGC and Indian Oil were among other stocks that traded in the red.

Factors driving markets

RBA meeting: The Australian central bank will meet to decide its policy rates on Tuesday. A drop of the RBA’s key policy measure, targeting ultra-low short-term rates would signal a change to the bank’s dovish stance and could be a preamble to the Fed’s meeting that markets expect will mark the start of its bond-buying tapering.

Raw material crunch: US manufacturing activity slowed in October, with all industries reporting record-long lead times for raw materials, indicating that stretched supply chains continued to constrain economic activity early in the fourth quarter.

Broader markets
Broader market indices were trading higher, outperforming their headline peers in morning trade. Nifty Smallcap was up 0.66 per cent while Nifty Midcap advanced 0.80 per cent. The broadest index on NSE, Nifty 500 was up 0.46 per cent.

KPIT Tech, Kalyan Jewellers India, BASF, Aditya Birla Capital, Tata Power and Fortis Healthcare were gainers from the space while Aarti Industries, Oil India, GSPL, Sequent Scientific, KEC International and Balaji Amines were under selling pressure.

ONGC, DMart among the 9 techno-funda picks this Diwali

Diwali Stocks

Diwali is associated with investment and buying certain things for the future. On this Diwali, there cannot be any better alternative than equities for long-term investments. In Samvat 2078, markets may not maintain the same pace and see some profit booking at higher levels. However, we expect the sector and stock-specific action to continue, said CapitalVia Global Research. “Capital goods, banks, power, chemicals and textiles could lead the next leg of the rally, in tandem with the growth impulses seen across the economy.” The investment advisor has suggested some techno funda picks for the upcoming Samvat. Have a look:

Global markets
MSCI’s gauge of Asia-Pacific shares outside Japan recovered early losses to be 0.8 per cent higher at 0128 GMT, with Japan’s Nikkei edging 0.2 per cent lower and Australia’s S&P/ASX 200 down 0.6 per cent.

Chinese shares opened slightly lower, with local blue chips trading down 0.09 per cent, though the Hong Kong benchmark was up 1.8 per cent. South Korea’s KOSPI index opened 1.50 per cent higher.

Overnight, Wall Street advanced to record highs helped by gains for energy shares and Tesla.

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