Market Outlook 05-10-2009

Truncated week was a good one for Indian equities as major indices gained around 2.5% in the three trading sessions. Sensex and Nifty had weekly closings above psychological level of 17k and 5k respectively. On the other hand most of the other global markets declined substantially over this period with most of the damage being inflicted on Thursday and Friday. Most of the global markets have looked heavy for past few sessions and our market so far has been resilient. Technically, Nifty remains in an up trend as of now and some signs of trend reversal would be seen only if Nifty were to fall below 4870-80. We also enter earning season later next week and that might also influence the future direction of our market along with the global trend. Auto sector that had been the leader for past few months now, displayed some signs of waning momentum as prices of leaders like Hero Honda and Maruti failed to move up after both showed robust September sales figures. There could be some churning within the sector as M&M and Bajaj Auto could probably gain even as others might see some profit taking. Pharma continues to see good momentum while IT might pause till Infosys results. Amongst others some momentum could be seen in Sugar sector and stocks like Renuka and Bajaj Hind could gain in coming sessions. DLF and HDIL could seek higher levels if they start trading above 450 and 340 respectively. Others that could move up in not so negative overall sentiments are Aban, Jindal Steel, REC and Mcdowells. Nifty has immediate support around 5010-15 and then around 4940-60.