Earnings to drive stock specific moves while IT sector to remain in focus

Market Outlook:

• Indian equity benchmarks snapped three week losing streak. Midcaps outperformed with gains of ~2% for the week
• Structurally we maintain our positive stance with Nifty target of 18100 in October with strong support at 16700 levels. Buy the dips
• For the coming week, we expect Nifty to hold 16900 with target of 17500. Sustainability above 17500 would lead to acceleration.
• Seasonality: Historically, September has been a volatile month. However, over past two decades, Q4 returns for Nifty has been positive (average 11% and minimum 5%) on 70% of the times. The history favours buying dips from hereon
• Relative outperformance: Indian equities continued to relatively outperform global peers while pricing in many negatives in the process. We expect outperformance to continue
• Sectorally, BFSI, Consumption, Pharma and PSU expected to outperform
• Preferred Largecaps: TCS, Indusind Bank, Bank of Baroda, Reliance Industries, Sun Pharma, Titan, Tata Motors, Coal India
• Preferred Midcaps: Havells, Bajaj Electricals, TCI Express, Tata communications, Tata Chemicals, Bharat Forge, Midhani, Cyient, Kewal Kiran Clothing