Trends on SGX Nifty indicate a positive opening for the index in India against October 14 close of 18,355.
Indian markets could open higher reflecting the gains in the Asian markets on Friday, despite mildly lower Asian markets today and in line with gains in the US markets on Thursday and Friday, said Deepak Jasani, Head-Retail Research, HDFC Securities.
Gaurav Udani, CEO & Founder, ThincRedBlu Securities., said, “The Nifty is expected to open positive at 18,430 up by 90 points. Nifty has support at 18,300 and 18,170 levels. Nifty is in a bullish trend and traders can consider buy on dips with strict stoploss for 18,480 and 18,540 as targets.“
Mohit Nigam, Head - PMS, Hem Securities, said, "The benchmark Indices are expected to open on a positive note as suggested by trends on SGX Nifty. US and European markets closed higher in the previous trading session while major Asian Indices started this week's journey on a negative note.
"The COVID-19 infections rate seems to be declining further as the daily addition of cases have been below the 20,000 mark for more than a week now, which resulted in easing of further restrictions across the country.
"The banking sector will be in focus in the coming week as HDFC Bank announced their earnings on Saturday with improving credit growth which can boost sentiment of the market as a lot of other banks will start releasing their quarterly earnings. The market will keep a close look on the oil prices as rising crude prices is a risk for India which may hit the industrial activity and economic recovery in the coming future.
"On the technical front, Benchmark Indices had gained for six consecutive sessions and last week's move is a consolidation breakout and we believe markets may continue this bull run. Immediate support and resistance in Nifty 50 are 18,200 and 18,500 respectively," Nigam added.
Nifty rose for the sixth consecutive session on October 14 to end the truncated week with healthy gains. At close the Nifty was up 176.8 points or 0.97% to 18338.6.
Nifty gained 2.48% over the week, the largest weekly rise in 6 weeks. Nifty rose on Wednesday and Thursday with runaway gaps which indicated strong upward momentum. Though the daily technical indicators are close to overbought levels, Nifty could rise post the long weekend on Monday helped by gains in the US markets over Thursday and Friday and cool down later. 18600 on the upside could be the resistance for the Nifty and 18190 could be the support in the near term. Q2 results from corporates could drive momentum in individual stocks. Realty, Financials and Metal stocks could be in limelight. Brent crude topped $85 a barrel in London for the first time since 2018, the latest milestone in a global energy crisis that has seen prices soar. This could create a trigger for a small reversal over the next few sessions.
US stocks close higher on Thursday
US stocks closed significantly higher on Thursday as investors weighed upbeat earnings from big banks, as well as economic data that showed a drop in first-time jobless claims to a pandemic low and smaller-than-expected rise in producer prices.
A continued fall in Treasury yields, meanwhile, offered support for interest rate sensitive technology stocks. The 10-year Treasury yield fell 1.9 basis points to 1.520%.
Investors also cheered economic data, including a drop in first-time claims for unemployment benefits last week to 293,000 — the first sub-300,000 reading since before the pandemic took hold in early 2020.
US stocks closed higher Friday, with major benchmarks booking a second straight week of gains, as quarterly results from Goldman Sachs and better-than-expected U.S. September retail sales helped fuel buying on Wall Street. All three major U.S. stock-market benchmarks posted a second straight week of gains. The Dow saw a weekly gain of 1.6%, while the S&P 500 advanced 1.8% and the Nasdaq rose 2.2%.
September retail sales indicated that Americans are spending enough money to sustain an economic recovery from the pandemic, even if consumers are paying more to do so. Retail sales climbed 0.7% last month, the government said Friday. Economists polled by The Wall Street Journal had forecast a 0.2% decline.
Americans have plenty of money to spend because of high savings, government stimulus and a tight labor market in which wages are rising sharply. A reading of consumer sentiment from the University of Michigan fell to 71.4 this month, from 72.8 in September. Americans remain wary of the impact of the ongoing COVID-19 pandemic and persistently high inflation.
In other US data, producer prices rose 0.5% in September compared with 0.7% in August but were up 8.6% for the September year compared with 8.3% for the year to August.
India's trade deficit surged in September
India's trade deficit surged in September as imports saw a sharp rebound while exports remained strong. The trade deficit in September stood at $22.59 billion, compared to $13.9 billion in August. According to ICRA, the monthly deficit in September is at an all-time high. Imports soared to $56.4 billion, up 19.7% over the previous month. On an annual basis, exports rose by 22.63%. Exports rose to $33.8 billion, up 1.5% over August. On an annual basis, they jumped 84.8%.
Asian shares edged up on Friday, building on Wall Street's positive lead after a set of strong U.S. corporate earnings, although worries about the Chinese economy capped gains.
Electricity demand grows
India's electricity demand grew 4.9% during the first half of October, with supply falling short of demand by 1.4% despite a 3.2% rise in coal-fired generation and 30% rise in solar output.
Oil prices up
Oil prices hit their highest in years on Monday as demand continues its recovery from the COVID-19 pandemic, boosted by more custom from power generators turning away from expensive gas and coal to fuel oil and diesel.Brent crude oil futures rose 87 cents, or 1%, to $85.73 a barrel by 0111 GMT, the highest price since October 2018.U.S. West Texas Intermediate (WTI) crude futures climbed $1.12, or 1.4%, to $83.40 a barrel, highest since October 2014.
China economy slower than expected
China’s economy grew slower than expected in the third quarter, official data showed on Monday, as power outages and supply bottlenecks hurt factories while sporadic COVID-19 outbreaks weighed on consumption. Gross domestic product (GDP) expanded 4.9% in the July-September quarter from a year earlier, slowing from 7.9% in April-June and compared with expectations for a rise of 5.2% in a Reuters poll of economists.
China’s industrial output rose 3.1% in September from a year earlier, missing expectations, and slowing from 5.3% in August. Analysts polled by Reuters had expected output to rise 4.5%. Retail sales grew 4.4% in September on-year, compared with a forecast 3.3% increase and a 2.5% rise in August. Fixed asset investment increased 7.3% in the first nine months from the same period a year earlier, missing expectations for a 7.9% rise and slowing from an 8.9% jump in January-August. China’s property investment rose 8.8% in the first nine months of 2021 from a year earlier, slowing from 10.9% growth seen in January-August.
Shares of Chinese property developers climbed on Monday after China's central bank calmed markets by saying spillover effects from Evergrande's debt woes were controllable and the country's economy is "doing well".
Asian stocks down in early trading
Most Asian stocks and U.S. futures slid Monday as surging energy prices cemented worries about inflation, sending bond yields higher.