Market Recap:
It was positive start of October, on Tuesday for the market and the rally became stronger and impervious till end of the week. On Friday, the sensex closed at 31,814.22, after gaining 530.5 points in past week, similarly, Nifty50 closed at 9979.7 after gaining 191.1 points in last week. On Wednesday, 4th October, monetary policy committee of RBI left repo rate unchanged at 6% and also kept cash reserve ratio (CRR) remained unchanged at 4%, but cut statutory liquidity ratio (SLR) requirement by 50 basis points to 19.5%
The RBI revised the projected real gross value added (GVA) growth for 2017-18 downward to 6.7% from an August 2017 projection of 7.3%. Nevertheless, market didn’t seem to be fazed by the concerned shown by RBI and market rallied everyday till Friday.
Current Outlook:
I was not expecting such a sharp recovery in early October after having a tumultuous last week of September, however, factors like strong market breadth, wide participation and VIX at near all time low, compel me to think that the correction and consolidation in August and September has formed a descent base for a rally into year end, as historically period from October to December are in favor of bull. I noted, that sector rotation is taking place, as pharma is started to rebound, and the rally seems to continue, but financial didn’t see much in the way of gains that suggest money is only changing hands not looking out the way to exit. I could go much more deeply into the subject, but here I am giving you thinking about the kinds of events and factors which are significant for the market.
Conclusion:
Market has resumed its long term uptrend and the momentum is again just beginning to accelerate further. However, the most important aspect of a sustainable advance is that money should be rotating towards aggressive areas of the market like metals, autos, and financials. Hence, I would advice to pick your correlation carefully and never forget to keep a stop.
Enjoy Investing……..Be a Savvy Investor..!!
Pankaj