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Indian markets could open mildly higher, in line with mostly positive Asian markets today and despite mildly lower US markets on Tuesday - HDFC Securities

U.S. stocks closed lower Tuesday, after wavering between small gains and losses earlier in the trading session, as inflation worries appeared to weigh on sentiment ahead of the unofficial start of third-quarter earnings season. It was the third, straight day of losses for all three major indexes. With earnings season set to get under way on Wednesday, investors are worried that executives will report that supply-chain woes and inflation are chipping away at corporate profit, which could deliver a fresh hit to Wall Street sentiment.

The National Federation of Independent Business early Tuesday said its optimism index slipped one point to 99.1 in September, the lowest reading since March, as smallbusiness owners remained frustrated by shortages of supplies and skilled labor.

On the labor-market front, U.S. job openings dropped to 10.4 million in August from an unprecedented 11.1 million in July, according to a government report Tuesday. A record number of workers quit in August as businesses struggle to fill jobs.

The International Monetary Fund said it now sees global growth of 5.9% this year — down one-tenth of a percent from its July forecast — and then slowing to 4.9% growth in 2022. The IMF cut its U.S. growth estimate for 2021 by 1% to 6%, its German forecast by five-tenths to 3.1% and its Canadian forecast by six-tenths to 5.7%. The International Monetary Fund (IMF) on October 12 reiterated its gross domestic product outlook for India at 9.5 percent in FY2021-22 and 8.5 percent in FY2022-23, on the back of steady recovery post the second wave of the Covid-19 pandemic.

The Consumer Price Index-based (CPI) inflation for September 2021 came in at 4.35 percent, compared with 5.30 percent in August. This is the lowest retail inflation print since April 2021.The fall in headline retail inflation was primarily on the back of a sharp cooling in food inflation. India's factory output sustained its recovery in August compared to a month ago, even as growth in manufacturing slowed slightly. The Index of Industrial Production rose by 11.9% over last year in August 2021 compared to an 11.5% growth in July. On a month-onmonth basis, the index remained flat in August.

Asian shares were mostly higher on Wednesday despite worries about soaring power prices fuelling inflation that weighed on sentiment and drove expectations the United States would taper its emergency bond buying programme.

Nifty rose for the fourth consecutive session on Oct 12 after a weak morning session. At close the Nifty was up 0.26% or 46 points to 17992. Nifty has closed at the highest ever - closer to 18000 levels. Advance decline ratio improved as the day progressed to above 1:1. The upward momentum could continue with some intermittent profit taking. Subdued sentiments in the global markets could however slow this momentum.

Daily Technical View on Nifty

Nifty : V shape recovery on intraday chart

* Nifty opened on a negative note and remained in bearish mode for the first half of the day. In the second half, the index found support near 17850 level.

* The momentum indicator RSI formed a higher bottom formation on the daily chart and is at 60 level.

* 157 stocks made new 52 week high and only 6 made new 52 week low which indicates market sentiment is still bullish.

* The broader market outperformed in today's trading session as Midcap rose 0.55% and Small cap closed 0.80% higher

* On the sectoral front, except Nifty IT (-0.88), all sectors closed in the green. Nifty PSU Bank (+3.08%), Nifty Consumer Durables (+2.67%), and Nifty Media (+1.47%) closed in green

Nifty – Daily Timeframe chart

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