Sensex up more than 500 points as crude prices correct

New Delhi, Oct 5 (SocialNews.XYZ) The triple whammy of spiking dollar, US bond yields and crude is slowly easing, paving the way for a recovery in markets, says V.K. Vijayakumar, the Chief Investment Strategist at Geojit Financial Services.

The decline in the dollar and US bond yields are mild and therefore, not adequate for a reversal of FII selling, which continues to be very high. But the sharp correction in Brent crude to $86 is a big positive, he said.

Apart from the macro benefits, the crude correction will reflect positively on the stocks of oil consuming industries like paints, aviation and tyres, he added.

Sustained FII selling has impacted banking stocks in spite of their sound fundamentals. Q2 results of banks will be good and their valuations are attractive. This presents a good buying opportunity now, he said.

Capital goods stocks will continue to do well. Q2 results of autos, too, will be good, gaining from soft commodity prices. The market will start discounting this in advance, he said.

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher said Nifty indicated further weakness with gap down opening to make new low of 19,333 level and witnessed some recovery in the second half to minimise the loss to some extent with bias still maintained with a cautious approach.

The index would have the level of 19,200 as the major support zone from current levels and a decisive breach above 19,600 is necessary to improve the sentiment. The support for the day is seen at 19,300 levels while the resistance is seen at 19,600 levels, Parekh said.

BSE Sensex is up 507 points at 65,733 points on Thursday. TCS is up more than 2 per cent.

Source: IANS