Be selective in stock picking

The market gained for third day in a row as a fall crude oil prices and rup­ee gaining against the d­ollar boosted sentiment. Investors are building expectation on September quarter ear­n­ings season. The Sensex rose 297 points, or 0.85 per cent, to settle at 35, 162.48, while the Nifty 50 Index rose 72.25 points, or 0.69 per cent, to settle at 10,584.75. The broader market also saw strong buying with the BSE Mid -cap Index rising 1.14 per cent, wh­ile the Sm­all-cap Index rose 1.68 per cent. Both these indices outperfor­med the Sensex.

Technical view

Jayant Manglik, president, Religare Broking, said: “The equity benchmark indices registered healthy gains for third straight session. The domestic sentiments were boosted by subdued cru­de oil prices and marginal recovery in USD/INR. All the sectoral indices ended in green with Oil & Gas, Capital Goods an­d Realty being the top performers. Amongst th­e global markets, both Asian and European indices traded on a mixed note.

“We maintain our cautious view on the Indian market in the near term. Movement in USD/INR and crude oil prices would be actively tracked by the investors. Further, rising US yields are a concern to equity as an asset class and em­erging economies like India. On the domestic front, stock specific vola­tility would remain high on account of result announcement by companies. Hence, under uncertain market conditions, traders and investors should be selective in stock picking.

Market view

VK Sharma, head PCG & Capital Markets Strategy, HDFC Securities, said: “Yields on the 10-year government bond fell for the fifth session on a trot, hitting three-week low after India’s trade deficit data narrowed to a five month low. The 10-year gilt yield reached at 7.87 per cent from its previous close of 7.92 per cent. RBI is going to buy Rs12,000 crore rupees of bonds via Open Market Operation on Wednesday. This would be the part of a plan to buy Rs 36,000 of securities in October.

“Softening crude oil price from the recent highs and consumer price inflation has reduced policy tightening expectations. Brent cru­de oil, which last week surged above $86.7 per barrel for the first time in nearly four years, now placed around $80. The near term focus should remain on crude oil prices along with FOMC minutes scheduled today.”

—Ashwin Punnen