Markets at all-time high and last trading day of the month

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Celebration of Diwali continued in the Dalal Street as Sensex touched a record high of above 40392 mark by surpassing previous high of 40312 made on 04th June 2019. Sensex drifted to 36000 zones in the Mid of September month but witnessed good recovery in last two months led by FIIs flow, positive momentum from US indices, reducing tension over US – China trade war.

In October, FIIs have bought nearly $700mn in equities, while so far this year they purchased $8.87bn. Moreover, impressive corporate earnings and reports that the government is considering further tax reforms also boosted sentiments. Moreover, turnaround of Auto sales volumes in the festival sessions, good monsoon, stable oil price and USDINR added fuel in the market.

Global front, US S&P 500 touched all time high and Nikkei Index one year high on hope of US-China trade negotiation and reduced geo-political tension. Sensex gained by 3.78% in the month of October as it recovered from 36000 to 40392 marks. It has been making higher top – higher bottom formation and recent price structure suggests that momentum could gear up towards 41000 zones while 39300 zones could act as an immediate support to drive the positive stance of the benchmark index.

By- Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Private Ltd.