The Indian equity markets, driven by global and domestic factors, are expected to experience mixed volatility from October 1 to October 4, 2024. Here’s an analysis based on the performance on September 30, 2024, and relevant global cues.
1. Performance on September 30, 2024
On September 30, the BSE Sensex and NSE Nifty 50 demonstrated resilience, buoyed by strong performances in metals and financial stocks. This followed a week of record highs, largely driven by investor optimism around easing U.S. Federal Reserve policies, lower crude prices, and China’s stimulus efforts. The Nifty 50 hovered above the psychological 26,000 mark, and Sensex crossed 85,000, highlighting bullish sentiments in the market.
However, profit-booking late in the session resulted in slight corrections, suggesting that the rally might face resistance as it approaches overbought zones. The sectors leading the charge include metals, driven by hopes of economic recovery in China, and financials, spurred by stable global cues and foreign inflows.
2. Global Cues and Key Influencers
The Federal Reserve’s potential for dovish monetary policy—signaled by Jerome Powell’s remarks about possible rate cuts—continues to boost global markets. U.S. markets ended the previous week on a positive note, with expectations of a softer stance on inflation control. This easing of global interest rates is likely to support further foreign inflows into Indian markets.
Additionally, the release of auto sales data on October 1 will significantly influence market sentiment. Strong numbers, particularly from leading manufacturers, could lead to a rally in the auto sector.
Global macroeconomic factors such as oil prices, U.S. job data, and Chinese stimulus developments will play crucial roles in market direction. Any significant swings in these factors could introduce volatility in Indian markets, particularly in sectors tied to global trade and exports.
3. Expected Market Movements
- October 1: A potential bullish start driven by auto sales data and the beginning of Q2 earnings season. Global cues from the U.S. markets could also sustain positive sentiment.
- October 2–3: The mid-week might experience some profit booking, especially in sectors that have already seen significant gains (e.g., metals and financials). Investors may also become cautious ahead of macroeconomic releases such as the HSBC India Manufacturing PMI and Composite PMI.
- October 4: With corporate earnings updates starting to trickle in, stock-specific movements are expected, especially in IT and banking sectors, as firms release their quarterly results.
4. Key Sectors to Watch
- Metals and Commodities: Continued upward momentum due to Chinese stimulus.
- Auto: Strong auto sales data may trigger stock rallies early in the week.
- Financials and IT: Pre-earnings updates may result in selective stock movements.
Conclusion
Investors can expect cautious optimism in the first week of October, with global cues and macroeconomic data playing a pivotal role. While the overall trend might remain positive, especially in key sectors, profit-booking and market corrections are likely as indices reach near-record highs.
