Sensex rallies nearly 4000 points, Nifty around 1150 – What factors aided Indian markets in October?

Markets in October: The benchmark indices – Sensex and Nifty50 – registered a growth of almost 4000 points and 1150 points, respectively in October 2022. In percent terms, the frontline indices have reported one of the best months in 2022, up in the range of 6.5-7 per cent.

The rally in both key indices was mainly on the back of multiple positive factors among them was the softening of global crude oil prices, the market analyst pointed out. They also noted that the overall economic condition of India is improving and looks promising, which also gives comfort to markets.

Softening Crude Oil

“Primary reason for the rally was the declining oil, which for a country like ours, is a huge positive,” Sumit Chanda, CEO and Founder of JARVIS Invest said. Similarly, TradeSwift Director Sandeep Jain also largely contributed crude oil’s easing as a big positive to the domestic markets.

The crude oil prices have declined between 1-1.5 per cent, from three-digit to two-digit figure as of October 31.

Positive Global Cues

Besides, the US markets are up with the anticipation that they are resilient enough to avoid recession and the possibility of a moderating inflation which would mean the Fed toning down their hawkish stance, the CEO and Founder of JARVIS Invest further said.

Meanwhile, Jain mentioned that the US Fed is becoming lesser hawkish, similarly, the US markets have also bottomed out.

Foreign Investors Flow

The month saw the foreign investors’ turning net buyers and a reversal in the short positions that they had taken in index futures, Chanda said in his comment.

Strong Fundamentals

According to Jain, the overall fundamentals of India is splendid and the growth parameters such as Goods and Services Tax (GST), Direct/Indirect taxes have been strong. Moreover, the corporate results have been good, so is the corporate governance of various firms, he added.

Sectors Support

From a sector perspective, Chemicals, IT, Pharma, Auto, and Consumer Durables were the notable contributors for the month of October, Chanda added.

Markets In November

“While we saw a great end to the month today with Nifty closing above 18000 and Sensex above 60000, what is to be seen is the outcome of the US Fed meeting on 1st & 2nd November and the possibility of a Reserve Bank of India (RBI)’s meet on November 3, which will dictate the trend for the month of November,” the CEO and Founder of JARVIS Invest also stated.

What Should Investors/Traders Do?

Traders/Invstors are advised to remain upbeat and keep a close watch on thematic moves which may get unfolded in the first half of the forthcoming week, Angel One, a broking firm said, adding that the banking has taken a pause after the recent run but soon it is likely to move beyond all-time highs to enter uncharted territory.