indian stock market Bears tightened their grip on D-Street amid weak global cues and rising volatility, leaving it facing several challenges throughout October. These battles forced the frontline indices to enter a bear market just days before Diwali’24 Beginning of Samvat 2081. The market is on track to end Samvat 2080 in the red.
In the last week of October, investors will be closely watching key market triggers, including the next set of July-September quarter results for the financial year 2024-25 (Q2FY25)Scheduled monthly derivative expiry, Middle-East geopolitical tensions, foreign fund outflow, crude oil prices, global cues, US presidential election survey, domestic and global macroeconomic data.
Domestic equity benchmarks Nifty 50 and Sensex recorded their worst ever performance Longest weekly decline in 14 monthsAccelerating a broad-based selloff. Foreign investors continued selling in Indian equities, and weak corporate earnings further weakened sentiment.
The NSE Nifty 50 fell 2.7 per cent this week, and the 30-share BSE Sensex fell 2.24 per cent, registering a decline for the fourth consecutive week and fifth straight session. The Nifty 50 also slipped into the oversold zone, with the Relative Strength Index (RSI) slipping below 30 for the first time in a year ahead of the festive season.
Profit-booking, a weak demand environment, margin pressure and soft guidance from several companies contributed to the week’s decline. After a slow start, market sentiment remained negative throughout the week. As a result, both the benchmark indices, Nifty and Sensex closed at their weekly lows of 24,180.80 and 79,402.29.Respectively.
Sector-wise, realty, metal and auto saw notable declines, although IT remained stable. A major concern for traders is that the broader indices fell sharply between 5.75 per cent and 6.45 per cent after several weeks of relative outperformance. The Nifty 50 index has fallen eight per cent since September 27, when it hit a record high.
Foreign outflows have dragged the index down for the past 19 sessions as investors direct money to China over Beijing’s stimulus measures and cheap valuations. The India VIX volatility index jumped more than seven per cent to 15 on Friday and closed at 14.6 (+4.7 per cent). The market is set for its worst month since March 2020, when the COVID-19-led lockdown was imposed.
“A tough week for the markets! Investors’ psychology has become a bit gloomy due to the current geopolitical tensions and a Sharp reaction from foreign investorsWhich pulled the emotion. Vinod Nair, head of research at Geojit Financial Services, said the lack of triggers in the domestic market could impact near-term market sentiment.
The market witnessed broad-based selling, with consumption, midcap and smallcap stocks underperforming significantly. Foreign withdrawals and earnings will influence market sentiment this week. The upcoming expiry of October derivatives contracts is expected to increase volatility.
This week, the primary market will see action in the form of some new initial public offerings (IPOs) and important listings, which are scheduled in the mainboard and small and medium enterprises (SME) segments. This week will be important from a domestic and technical perspective as investors will keep an eye on corporate results, global markets and macroeconomic data.
The key triggers for stock markets in the coming week are as follows:
Q2 result
Shares of ICICI Bank, IDFC First Bank, Yes Bank, JK Cement, REC Ltd and Coal India will be in focus on Monday, October 28, as these companies declare their Q2FY25 results after market close on Friday or Saturday. Adani Power, Bharti Airtel, Federal Bank, RailTel, Tata Technologies, Adani Enterprises, Adani Ports, Maruti Suzuki, Dabur and JSW Infrastructure, among many other companies, are scheduled to declare their Q2FY25 results in the coming week.
“The quarter results were impacted by weak demand environment and margin pressure, which hit FMCG, metals, auto and realty the most. While IT remained relatively stable and contributed less to the overall deficit on expectations of a pick-up in BFSI spending and a favorable outlook in US spending,” said Vinod Nair of Geojit Financial Services.
No new IPO, 3 listings on D-Street
According to stock exchange data, no new public issues have been listed for subscription in the coming week. However, Swiggy IPO and ACME Solar Holdings IPO will open for bidding soon. Final dates for these issues had not been released at the time of writing this story. Among the listings, shares of Vaari Energies, Deepak Builders & Engineers and Godavari Biorefineries will debut on stock exchanges BSE, NSE this week. From the SME segment, shares of five SMEs will debut on BSE SME or NSE SME.
FII activity
Foreign institutional investors (FIIs) sold equities worth Bought equities worth Rs 20,025 crore last week, while domestic institutional investors (DIIs) bought equities worth Rs 20,025 crore 22,914 crores. FIIs recorded significant outflows of almost Rs 1 lakh crore in October, while DIIs bought equities worth approx 97,000 crores.
While DIIs continue to support the market, the market direction largely depends on FII inflows, earnings results and the global geopolitical scenario. DII attempted to offset FII outflows, but analysts noted that selling pressure from retail and high net worth individual (HNI) traders had started to emerge.
Amid ongoing geopolitical tensions and cheap valuations in the Chinese stock market, foreign portfolio investors (FPIs) continued their strong selling streak in the Indian market and turned net sellers in a sharp U-turn in October.
FPI sold Indian equity worth Rs 85,790 croreand net outflow remained constant Considering debt, hybrid, debt-VRR and equity, it stood at Rs 89,977 crore as of October 25. FPI outflows reached a 10-month high in October, the highest year-to-date (YTD) selloff in the Indian market. The total debt investment in October is 410 crores.
global signal
Despite the lack of coordination with global markets, US market performance will remain relevant, especially with continued speculation on rate cuts and the upcoming presidential election. Over the past week, the Dow Jones Industrial Average (DJIA) declined more than 2.5 percent, while the S&P 500 and Nasdaq Composite showed mixed trends, finishing flat to slightly down.
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“On the global front, geopolitical developments, especially the Iran-Israel situation, will be closely monitored for their potential impact on crude oil prices. Markets across the world take a cautious “wait and see” stance ahead of the US presidential election. Can adopt.” said Santosh Meena, Head of Research, Swastika Investmart Limited.
Key macroeconomic data releases – such as the US jobs report, GDP data and China’s PMI manufacturing data – will be key indicators along with the US core PCE price index release on October 31, the US Federal Reserve’s preferred inflation gauge. The Bank of Japan will announce its interest rate decision on October 31.
oil prices
International crude oil prices remained at a high in the previous session, rising four percent over the past five days as investors took stock of the ongoing geopolitical conflict in the Middle East, putting US crude supplies at risk of higher prices ahead of the Related concerns are arising. Presidential elections next month.
Brent crude futures were up $1.67, or 2.25 percent, at $76.05 a barrel.US West Texas Intermediate (WTI) crude closed at $71.78, up $1.59 or 2.27 per cent. Both benchmarks fluctuated, rising on Monday and Tuesday before falling on Wednesday and Thursday due to Middle East risk expectations.
Brent closed up four percent this week, while WTI closed up 3.7 percent in the last five sessions. Domestic crude oil futures closed 2.18 percent higher. 6,040 per barrel on the Multi-Commodity Exchange (MCX).
corporate action
Shares of several leading companies will trade ex-dividend in the coming week starting Monday, October 28, such as ICICI Lombard General Insurance Company Ltd, Infosys Ltd, Mazagon Dock Shipbuilders Ltd, among others. Some companies have also announced corporate actions such as share buybacks, bonus issues and stock splits. View full list Here
technical scene
After four weeks of decline, the Nifty index is moving closer to support near 24,000 levels. According to Ajit Mishra – SVP, Research, Religare Broking Ltd., a break below this could further weaken sentiment, potentially pushing the index towards the 200-day exponential moving average (DEMA) around 23,450 points.
On a rebound attempt, resistance may first emerge at the 100 DEMA around 24,500 and then around 24,850. However, with most sectors except IT under pressure, oversold conditions could trigger a selective rebound.
“Traders should continue with the “sell on rise” strategy and exercise extra caution, especially with midcap and smallcap stocks. Amid the current negativity, investors may consider gradually accumulating high quality stocks with long-term investments,” Mishra said.
Santosh Meena of Swastika Investmart said Nifty has broken out of the head-and-shoulders pattern, increasing the chances of testing its 200-day moving average (DMA) around 23,400 levels. Intermediate support lies at 24,000-23,900, while 24,600-24,700 remains an immediate resistance zone, while 25,000 is a key hurdle on the upside.
Bank Nifty has fallen more than 7.5 per cent from its all-time high and closed 2.51 per cent lower this week at 51,100 points and below the 21-week EMA, indicating increasing selling pressure. This fall comes after disappointing second quarter results of AU Bank, IndusInd and Kotak Bank.
“Immediate support is located at 50,200; Breaking this level could extend the fall to 49,600. Conversely, 51,100 EMA will act as resistance, a strong close above it will potentially invite buying interest towards 51,800,” said Palaka Arora Chopra, Director, Master Capital Services Ltd.
Disclaimer: The views and recommendations given in this analysis are those of the individual analysts or broking companies and not of Mint. We strongly advise investors to consult certified experts before making any investment decisions, as market conditions can change rapidly and individual circumstances may vary.
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