Nifty’s Sudden Fall: Bears Take Control as Markets Tumble! Are Investors Prepared for the Coming Storm?

At the close, the Nifty 50 was at 25,810.85 down by 1.41%

September 30, 2024. The Indian stock market was in for a rough ride today. Nifty 50 opened in the red, plunging by 1.41%, and by the end of the day, it had slipped below 26,000—closing at 25,810.85. A wave of uncertainty swept across Dalal Street as the bears took control, pulling down the index amid rising geopolitical tensions and anticipation around Federal Reserve Chair Jerome Powell’s speech tonight.

But what led to this sharp decline?

From the very start, it was clear that the market was under pressure. Weak global cues triggered a gap-down opening, and as the day progressed, losses deepened. Only the metal and media sectors managed to stand tall, both up by 1%. All other sectors, from auto to IT, felt the pinch, slipping by 1-2%.

The day saw the Nifty break its psychological barrier of 26,000, spiraling down to its lowest level of the session. A strong bearish candle formed on the charts, a clear signal of further weakness ahead. Adding to the market’s woes was a negative divergence in the RSI (14), hinting at more pain in the short term.

Will Nifty break below 25,750? If it does, brace for an even deeper correction. On the upside, 26,000 remains the key resistance.

The Bigger Picture: What’s Driving the Nifty Down?

The fall wasn’t without reason. Here are the top 5 factors weighing on the market today:

Rising Middle East Tensions
Conflict in the Middle East is escalating rapidly, with Israel’s strikes on Iranian-backed forces igniting fears of a broader conflict. Hezbollah leader Sayyed Hassan Nasrallah’s death has only intensified the situation, leaving investors jittery and shifting their focus to safer assets like gold.

China’s Stimulus Rally
China’s massive fiscal and monetary stimulus has triggered a 18% surge in the Hang Seng index for September, drawing attention away from Indian markets. Foreign investors are moving funds to China, thanks to its cheap stock valuations and hopes of a Chinese economic revival.

Profit Booking
After a six-session rally, which saw gains over 3%, investors were quick to cash in on profits. With no major triggers to sustain the upward momentum, the market saw a wave of selling pressure.

Mixed Global Cues
Mainland China’s stock surge continued today, thanks to better-than-expected PMI data, but the underlying contraction in the manufacturing sector has left global investors cautious.

Powell’s Speech and US Data
Investors are keeping a close watch on Jerome Powell’s speech and key US economic data this week. With crucial reports on job openings and unemployment rates around the corner, markets remain nervous about what lies ahead.

The storm on Dalal Street seems far from over. With geopolitical tensions rising, China rallying, and uncertainty over the US economy, it’s anyone’s guess where the market will head next.

Bank Nifty: Down by 1.59%

The markets saw a rough start today, with the Bank Nifty opening in the red, down by 1.59%, eventually closing at 52,978.10. The BSE Sensex followed suit, dropping 1.49% to close at a low of 84,299.78.

In the sectorial front, the Metal sector took the spotlight, climbing an impressive 1.33%, signaling strength in an industry known for its cyclical nature. Among the big winners in this sector, NMDC Ltd. stole the show with a remarkable gain of 4.03%, while APL Apollo Tubes Ltd. also surged, gaining 3.63%.

On the flip side, the Auto sector found itself in reverse, ending the day as the top loser with a steep decline of 2.11%. Hero MotoCorp Ltd. took a significant hit, falling by 4.03%, while TVS Motor Company Ltd. followed closely behind with a loss of 3.21%.

Foreign Institutional Investors (FII/FPI) faced a challenging day, with a buy value of Rs. 16,620.77 Cr. and a sale value of Rs. 26,412.70 Cr., resulting in a net value of Rs. -9,791.93 Cr.

Domestic Institutional Investors (DII) stepped up their game, recording a buy value of Rs. 17,880.53 Cr. and a sale value of Rs. 11,234.73 Cr., leading to a net value of Rs. 6,645.80 Cr.

Bank Nifty

The Nifty Banking sector had some gainers and some losers for the day.

The gainers included Federal Bank with a 1.45% increase, AU Bank with a 1.36% increase, and IDFC First Bank with a 0.09% increase.

On the other hand, the biggest losers in the sector included Axis Bank with a 3.29% decline, ICICI Bank with a 2.45% decline, Punjab National Bank with a 2.08% decline, Canara Bank with a 1.87% decline, and State Bank of India with a 1.83% decline. These results suggest that some of the banking stocks not performed better for the day.

Gold and Silver Rate (INR) 30th September, 2024

Rupee Slides Amid Equity Market Decline: What’s Driving the Pressure?

The rupee faced pressure, tumbling 11 paise to settle at 83.80 against the US dollar, as the Indian equity markets took a sharp dive. But what’s behind this sudden drop? A combination of volatile crude oil prices and foreign fund outflows weighed heavily on the local currency.

Adding to the suspense, the greenback’s weakness against major currencies provided some support to the rupee. Yet, investor participation remained muted, with eyes locked on the upcoming domestic macroeconomic data this week.

China’s latest stimulus measures have also played a role, pulling foreign investors toward better-performing Chinese markets. This withdrawal hit the rupee hard as it opened at 83.72 and touched an intra-day low of 83.81 before settling at 83.80.

Just last Friday, the rupee had already slipped 3 paise, closing at 83.69. With weaker-than-expected US economic data, optimism around possible Fed rate cuts grew, but rising geopolitical tensions in West Asia and volatile crude oil prices continue to cloud the outlook.

Will the rupee face further declines? Traders are now turning to India’s fiscal deficit and current account deficit data for clues, while US non-farm payrolls and ISM manufacturing PMI reports will also play a crucial role. The USD-INR spot price is expected to hover between ₹83.60 and ₹84, keeping the markets on edge.

Meanwhile, the dollar index softened slightly, and Brent crude declined in futures trading, setting the stage for an interesting week ahead in the forex markets. Is this the calm before the storm? Stay tuned!

Stocks Highlights

JSW Steel Ltd. has seen its share price climb by an impressive 2.93%, moving from a previous close of Rs. 1,001.55 to a last traded price of Rs. 1,030.85. But what lies beneath this rise? Over the past three years, JSW Steel has delivered a solid return of 51.95%, slightly outpacing the Nifty 100, which provided a return of 49.4%. However, in the Metal sector, its performance pales compared to the Nifty Metal, which saw a remarkable 77.07% return over the same period.

Digging deeper, it’s worth noting that the company allocated 4.63% of its operating revenues toward interest expenses, alongside 2.62% for employee costs for the year ending March 31, 2024.

On the other side of the spectrum, Hero MotoCorp Ltd. experienced a downturn, with its share price dropping by 4.03% from a previous close of Rs. 5,957.35 to a last traded price of Rs. 5,717.00. But the story doesn’t end there. Despite this decline, the company’s annual revenue growth stands at 11.28%, outperforming its three-year CAGR of 6.96%.

When it comes to returns, Hero MotoCorp has achieved an impressive 110.25% over three years, significantly outpacing the Nifty 100’s return of 49.4%. Yet, it’s important to highlight that this return lags behind the Nifty Auto, which boasted a 158.13% gain over the same timeframe.

In terms of costs, Hero MotoCorp has been frugal, spending less than 1% of its operating revenues on interest expenses and 6.54% on employee costs for the year ending March 31, 2024.

Advance Decline Ratio

Today, the advance-decline ratio was 0.64, and the market breadth was negative. The volatility index India Vix increased by 6.89 to settle at 12.79 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1088
Decliners – 1701
52Wk High – 160
52Wk Low – 72
High Band Hitters – 125
Low Band Hitters – 108
200d SMA – 23063
50d SMA – 24981
20d SMA – 25480

Top Gainers and Losers Stocks

The top gainers were JSW Steel (+2.93%), NTPC (+1.37%), Hindalco (+1.14%), Britannia (+1.06%), and Tata Steel (+0.84%).

The top losers were Hero MotoCorp (-4.03%), Axis Bank (-3.29%), Trent (-3.20%), Reliance (-3.13%), and Bharat Electronics (-3.05%).

Top Gainers and Losers Sectors

The top gainers sector were Metal (+1.33%), and Media (+1.12%).

The top losers sector were Auto (-2.11%), Financial Services (-1.72%), Realty (-1.68%), Pharma (-1.01%), and IT (-0.87%).

SECTORS – NOTABLE ACTION
METAL +1.33%
MEDIA +1.12%
AUTO -2.11%
FINANCIAL SERVICES -1.72%
REALTY -1.68%

Stocks Ban List

Today, there are no stocks listed in the F&O ban list by SEBI.

A stock enters the Ban List if its MWPL is above 95%. Implying that, Ban List shows the Futures and Options (FnO) stocks whose combined open interest in all FnO contracts for a given period crosses 95% of Market-Wide Position Limit.

RBLBANK, HINDCOPPER, BANDHANBNK, and BSOFT stocks has the possibilities of entrance in the ban list.

Daily Pivots

As per the above pivots data, 25500 to 26100 is the Nifty 50 trading range.

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This article is only for educational purposes and is not an investment advice.