The Sensex and Nifty 50 have had an impressive start to the September series, with the Sensex not declining a single trading session and the Nifty 50 gaining in all but one session. This record-breaking rally has resulted in investors gaining Rs 14 lakh crore in just the first two weeks of the month. Despite two major headwinds – rising crude oil prices and a strong US Dollar index – the Indian markets have continued to perform well.
According to Vikash Jain of CLSA, India has the most compelling earnings growth story among the top-20 global markets, with a projected 17 percent CAGR over the next two years. Chris Wood of Jefferies believes there could be a correction in the midcap space due to the rise in oil prices. However, he notes that valuations for big cap stocks are not particularly extended.
The Nifty 50 has gained nearly 1,000 points so far in the September series, and chartists predict that it could move higher by another 200-250 points in the short-term. The largecap theme is expected to continue, with stocks like HDFC Bank, Axis Bank, and TCS showing multiple bullish structures.
The Nifty Bank is facing strong resistance at higher levels, but the sentiment remains positive as long as it sustains above 46,000. The Nifty Auto index was the top sectoral gainer on Friday, with stocks like Bajaj Auto hitting a record high. Vikas Khemani of Carnelian Capital Advisors believes that the auto sector will continue to grow due to factors such as newer vehicles, rising income levels, and innovation.
In terms of F&O cues, there were stocks that added fresh long positions on Friday, including IPCA Labs, Oracle Financial Services, and Bajaj Auto. On the other hand, stocks like Apollo Tyres and IndiaMart Intermesh saw an increase in short positions. Some stocks also witnessed short covering, such as Balrampur Chini and HDFC Bank.
As for stocks to watch out for, Vedanta will have a board meet on September 21 to consider the issue of NCDs, while Vodafone Idea has made a payment to the Department of Telecom regarding the 2022 spectrum auction. The government has also hiked the windfall tax on crude oil, and companies like Indian Oil Corporation and Hindustan Aeronautics have made significant announcements.
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