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Nifty Bulls Roar Back: 900-Point Rally Ignites Market Optimism
18 Oct
Summary
- Nifty recovered 900 points from lows, surpassing 23,000 in six sessions.
- US sanctions waiver on Russia and foreign investor flows are boosting markets.
- Crude oil prices jumped to $110/barrel, posing a potential market concern.
The Indian Nifty index has witnessed a significant rebound, recovering 900 points from recent lows to cross the 23,000 mark within just six trading sessions. This recovery marks the first consecutive weekly gain for Nifty bulls in three months.
Several global and local factors are underpinning this surge. A key development is the US decision to waive sanctions on Russia for at least six months, easing concerns for countries with existing energy deals. This, coupled with potential volatility from upcoming US midterm elections, could redirect capital towards emerging markets like India.
Furthermore, India's IT sector experienced its best week since 2008, partly influenced by AI-related market shifts in Wall Street. While Infosys's upcoming results are highly anticipated, other IT firms have reported largely decent quarterly earnings, with the street penalizing exceptions like Persistent Systems.
Despite positive momentum, potential headwinds exist. The rapid 900-point rally in Nifty could prompt profit-taking, with 23,200 identified as a resistance level. Additionally, rising crude oil prices, nearing $110 a barrel due to ongoing West Asian hostilities, present a significant concern.
The Nifty Bank index is poised to be a market mover, with major banks releasing their results. Analysts anticipate a potential tug-of-war between bulls and bears, exacerbated by the weekly options expiry and an upcoming stock market holiday.
