Indian stock markets rallied after the Reserve Bank of India (RBI) decided to hike rates by 50 basis points. The markets snapped a 7-day losing streak with Sensex gaining over 1,000 points and the Nifty rallying nearly 300 points. Financials led the rally with the Nifty bank index gaining nearly 3 percent.

However, for the week, both Sensex and Nifty tumbled over a percent. Metal stocks were the biggest losers ending the week over 4 percent lower. Auto and financials were also down over 2 percent for the week.

Rahul Arora, CEO of Nirmal Bang Institutional Equities believes that Nifty could probably move in a range between 15,000 and 19,000 for the current year.

"If you see the last two years of COVID, corporate India’s balance sheets are as healthy as they have ever been. Debts are at the lowest level, cash flows are at the highest, capacity utilisation is at 73 percent. So if you have a situation where capacity utilisation inches up to 80 percent, you are probably getting into a situation where profit growth is going to be extremely handsome," he said.

"So if you look at the market from that perspective, you will buy every dip. However, the US has gone completely out of whack with interest rates and we don’t know how severe the recession is going to be. So if that pans out then the pain could be slightly more protracted and you may have a situation where earnings growth might come through but it may not be backed by the kind of liquidity to buy the stocks that you had over the last two years. So, you may land with a neutral year where the Nifty probably moves in a range between 15,000 and 19,000," Arora added.

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First Published:Sept 30, 2022 8:38 PM IST