Caution advised at higher levels

Market outlook for October ‘14

The month of Sept saw profits getting trimmed after the Nifty hit an all time high of 8180 and by the end of month the index had again slipped back below 8000 .Thus the month of Sept closed almost unchanged with net gains of 10 points.


The month was largely dominated by the visit of the Chinese premier to India followed by the US visit by the Prime Minister .Prior to these 2 major events the Indian Prime Minister had visited Japan .The visits did show positive results with increased interest in investment in India by the 3 majors. Amidst all this euphoria however the Indian markets witnessed profit-taking with the FII net sell figure consistently increasing .The rupee also started weakening from Rs 60.50 to 61.50 in the period .Sentiments were also affected by the Supreme  Court verdict on the de-allocation of  coal blocks across the board.

 

Going forward the main focus will be on the corporate results which will be the litmus test for several counters which have seen sharp run up in the past 3-4 months .Sectors to be watched out are the OMC’s which have seen some favorable times in the past few months with the crude weakening in the background of a weakening rupee  providing double boost to the bottomline .Besides the periodic increase in diesel prices has wiped out the diesel under-recovery .Other sectors to be watched out are the auto & auto ancillaries in the backdrop of improving  off take in auto sales .On the negative side the metals could see some dismal numbers mirroring weak global prices  .Capital goods will  be keenly watched after some dismal numbers from likes of L&T in the previous quarter .

 

All in all caution is advised .The Research desk is focusing on quality stocks which could be bought at declines .We have included a cement industry report in this month’s Market Pulse since this industry could see a clear uptrend once the infrastructure activity picks up in the coming months.

 

Wishing all readers a very Happy Diwali and a prosperous year ahead!

Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing.

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