The start of the fresh monthly series at the NSE The derivative segment will begin on a positive note on Friday. According to analysts, global sentiment will continue to keep bulls alive at the bourse on Friday as well.
Asian stocks are up, led by China, as the country is gearing up to increase fiscal support and stabilize the property sector to revive growth. China’s benchmark CSI 300 Index is headed for its biggest weekly gain in almost a decade.
Vishnu Kant Upadhyay, AVP, Research and Advisory at Master Capital Services Ltd, said: The Indian benchmark indices extended their winning streak, with the Nifty50 reaching a new all-time high of 26,250.90 during the main expiry day. Meanwhile, the Sensex surged to 85,930.43 before closing at 85,836.12. The rally in the indices can be attributed to increased foreign inflows, following the US Federal Reserve’s decision to cut interest rates by 50 basis points last week.
“Growing global optimism further boosted investor confidence, as China, the world’s second-largest economy, pledged to reduce its Reserve Requirement Ratio (RRR) by 50 basis points amid ongoing economic challenges. Apart from that, a rebound in index heavyweights played a crucial role in propelling the indices to record highs, he added.
According to analysts, the market will continue to remain bullish thanks to all-round support by domestic institutions, retail investors and now foreign portfolio investors. However, profit-taking at higher levels will keep the mid- and small-cap space under check.
Rajesh Bhosale, Technical Analyst – Angel One Ltd, said: Bulls are in cruise control, marking their fourth consecutive series gain, with the Nifty climbing more than 4 per cent in the September series. “As we move into the new series, while there are no visible signs of weakness, it’s important to note that the recent series (August – September) started on a weak footing. Therefore, the first couple of days in the new series will be crucial to see how the market reacts. Given the current overbought conditions across several parameters, it might be wise for traders to book profits at higher levels and look for re-entry opportunities during any corrective phases,” he added.
According to a study by domestic brokerage IIFL, the market-wide rollover stood at 87 per cent, while that of Nifty: 79 per cent, Bank Nifty: 67 per cent and stock futures: 87 per cent.
“FPIs add index futures longs; retail unwinds stock futures longs: While FPIs start the October series with net long index futures OI of about 336k, interestingly retail net long OI in stock futures saw unwinding (from 1945k contracts at the start of September expiry to about 1761k contracts).”
The Nifty 200 index has now given 11 consecutive months of positive returns of 38 per cent (from November 23 till September 24), it observed. “Previous best was 10 consecutive months of positive returns of 38% from February 14 till November 14. However post this phase, the Nifty 200 Index had corrected by 16% in the following 3 months. It will be interesting to see whether history repeats this time around as well,” the brokerage further said.