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Quote on Morning market 14 October  2022 By Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

The uncanny ability of the market to surprise was in full flow yesterday when the S&P 500 shot up by 5% from the day’s lows despite the September CPI inflation numbers coming slightly higher than expectations. Such sharp rallies happen due to market positioning. The market was oversold on expectations of higher inflation and the consequent continuation of the hawkish Fed stance. This oversold market positioning triggered short covering resulting in an incredible 1400 up move in the Dow from its low levels. Similar short covering and sharp rallies can happen in India too. The big question, however, is regarding the durability of this rally. Under the present unfavourable global macro construct, the rally is unlikely to sustain beyond a level

An important takeaway from the IT results announced so far is that the segment is doing well and the management commentary is optimistic. After the sharp correction in IT stocks from their highs, there is value in the segment now. Financials too, particularly the leading banks, are likely to come up with very good numbers in the coming days. These two segments - IT and financials- can impart resilience to the market in the near-term.

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