New Delhi [India] : Indian stock indices extended losses from the past week’s closing, though marginally, and all eyes are now on a series of Q2 company earnings of sectoral majors coupled with wholesale inflation data for September due later in the day.
Sensex and Nifty were about 0.2 per cent lower each at the opening bell on Monday.
‘From the geopolitical perspective, we are in uncharted territory and, therefore, prudence demands that investors remain cautious,’ said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
‘Holding cash would be a good strategy in this uncertain time. The cash component in the portfolio may be increased as a measure of caution. Also, this will enable investors to buy when there is a big dip in the market, and it is important to note that big dips can happen since valuations are high,’ Vijayakumar further advised.
‘Paints, tyres and aviation stocks will be under pressure from the rising crude. HDFC Bank results today will be keenly watched by the market.’
Company earnings will steer the financial markets, both in India and overseas this week, with domestic heavyweights Reliance, Wipro, Axis Bank, Bajaj Finance, and UltraTech Cement releasing results.
Wholesale inflation in India based on the Wholesale Price Index continued to stay in the negative zone for the fifth straight month through August, besides hitting a fresh multi-year low.
In August, it was at (-) 0.52 per cent. The wholesale price index (WPI)-based inflation had been in double digits for 18 months in a row till September 2022, but falling since then.
‘Nifty is currently hovering around the short-term average (20 EMA) but facing stiff resistance due to lack of participation from two key sectors viz. IT and banking. We doubt that it could make a meaningful recovery without their contribution as they combined hold nearly 50 per cent weight in the index,’ said Ajit Mishra, SVP – Technical Research, Religare Broking.
‘At the same time, other sectors like auto, energy, pharma, realty and metal are showing resilience so traders should align their trades accordingly. Also, we suggest keeping a check on position size and overnight risk management as volatility will remain high,’ Mishra advised.