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Below Quote Daily Market Analysis 14 October 2023 By Mr. Ajit Mishra, VP - Research, Religare Broking Ltd

Markets remained volatile for yet another week but managed to end in the green.  The beginning was downbeat, tracking feeble global cues but the situation improved in the following sessions with stability in the world indices. However, pressure in the IT majors combined with the prevailing underperformance of the banking pack continues to weigh on the sentiment. Eventually, both the benchmark indices, Nifty and Sensex, settled with modest gains to close at 19,751.05 and 66,282.74 levels. Meanwhile, buoyancy in select key sectors like auto, FMCG, energy and realty kept the traders occupied. Besides, the positive tone on broader indices further eased the pressure.

Apart from earnings, global cues would continue to play a critical role in setting the direction of our markets. Among the key indices, the US benchmark, the Dow Jones Industrial Average (DJIA), tested a hurdle at 33,800 and couldn’t surpass it. We need a decisive break above 34,200 for a steady recovery else the decline would resume.

Nifty is currently hovering around the short term average(20 EMA) but facing stiff resistance due to lack of participation from two key sectors viz. IT and banking. We doubt that it could make a meaningful recovery without their contribution as they combined hold nearly 50% weight in the index. At the same time, other sectors like auto, energy, pharma, realty and metal are showing resilience so traders should align their trades accordingly. Also, we suggest keeping a check on position size and overnight risk management as volatility will remain high.  

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