The bulls have been throwing some heavy duty punches at the bears and the bears seem to have thrown in the towel. Today is a heavy day with a number of events. For starters, the market would react to the scrapping of the retro tax. While one would watch out for names like Vodafone-Idea, the biggest question is: does it lead to an uplift in foreign investor sentiment?
Apart from that, there is the RBI monetary policy announcement in which rates are likely to be unchanged with focus on inflation commentary. Anecdotally, the policy impacts on markets have lasted for an hour and any dip because of policy is normally used as an opportunity to buy. So it will be interesting to see the market reaction today.
In terms of earnings, Hindalco and M&M will report their numbers. From the broader market, many big names like Voltas, Zee, Nalco, SAIL and Muthoot Finance will be reporting their earnings.
Now that’s about the events. What about data and other cues?
Well, it’s clear that the Nifty has started a fresh expansion after breaking the range which it was stuck at in July. The next logical move for the Nifty should be to 16,500 before any consolidation takes place. Midcaps have underperformed for two days and chances are that largecaps will continue to dominate for some more days before the midcap rally resumes.
The index to focus on will be Bank Nifty. I say that because after a long time, HDFC Bank and Kotak Mahindra Bank seem to be making a comeback. While ICICI Bank and SBI are in a bull market of their own, if the rally continues in HDFC Bank and Kotak Mahindra Bank, then perhaps the Bank Nifty can also make a move towards its peak. As of now, it is the only major index with some distance to its previous peak.