Indian Markets Struggle as Nifty 50 Drops Amid Trade Concerns Linked to Trump. Will the Nifty 50 Bounce Back?

At the close, the Nifty 50 was at 24,199.35 down by 1.16%

The Indian equity markets took a sharp turn today, leaving investors with a lot more questions than answers.

Why did the Nifty 50 tumble by 1.16%? Despite a promising start, the Indian benchmark indices faltered, closing below the critical 24,200 mark. Investors, gripped by uncertainty, held their breath as the Nifty dropped a significant 284.70 points, ending at 24,199.35.

What triggered this sudden shift? The markets, which had been riding high on a two-day winning streak, succumbed to selling pressure across sectors. There was a palpable sense of caution in the air, as investors waited on tenterhooks for the outcome of the US Federal Reserve’s monetary policy decision. With the Federal Open Market Committee (FOMC) announcement looming later tonight, the markets couldn’t sustain their earlier optimism.

As the session unfolded, the Nifty failed to capitalize on its initial momentum, and the market’s early gains were swiftly erased, leaving many to wonder: What’s next for the Nifty and Indian equities?

Is a Market Correction Imminent?

It seems the market has entered a delicate phase. The Nifty’s failure to push past the 21 EMA (Exponential Moving Average) suggests the possibility of a deeper correction. A bearish engulfing pattern has formed on the charts, which historically indicates weak sentiment and potential for further downside.

Could the Nifty 50 be headed for a more significant drop if it fails to stay above 24,200? Investors are starting to worry that the market could be at the start of a much-needed correction or, worse, heading into a volatile phase, as they closely watch for any signs of further instability.

The Global Context: Is This Just the Calm Before the Storm?

The US Federal Reserve’s upcoming rate decision is hanging like a shadow over global markets. The anticipation of a rate cut has investors anxious, but there’s uncertainty about whether the Fed will act this time, especially with inflation concerns making the rounds. Any change in rates could trigger significant market movements—and not just in the US, but across global markets.

Add to this the slump in the rupee, which has hit fresh lows, and the relentless outflows from foreign institutional investors (FII), and it’s clear: there are too many unknowns for comfort. The markets are on edge, hesitant to make big moves as they await the Fed’s decision.

The Trump Factor: Will His Win Impact Emerging Markets?

The aftermath of Donald Trump’s US presidential win has left ripples in global markets. Despite the initial Trump-induced rally, Indian markets are now reconsidering their stance. While Trump’s pro-growth policies, such as corporate tax cuts, could boost the US economy, the unintended consequences are becoming more apparent—especially for emerging markets like India.

Higher tariffs, a stronger US dollar, and potential trade wars could hurt India’s export-driven economy, especially sectors like IT. As Trump’s policies unfold, investors will need to carefully assess the global trade landscape and its potential impact on India’s markets.

Can India Weather the Storm?

With so much global uncertainty, investors are treading carefully. The selling in IT stocks today, the FII outflows, and the looming risk of a trade war with China suggest that volatility may be the name of the game for the foreseeable future. Investors are also keeping a close watch on the China stimulus package discussions, as any large-scale monetary easing could shift market dynamics.

The question remains: Can India navigate through these turbulent waters, or will the storm get worse before it gets better?

What’s Next for the Nifty?

• The wait for the Fed’s decision continues, and sentiment could worsen if the Nifty fails to hold the 24,200 mark.
• Rupee weakness and foreign fund outflows remain persistent concerns.
• All attention is on Trump’s policies, which could have ripple effects for India’s export and IT sectors.

As investors stay on the edge of their seats, the question is: Will the markets stabilize, or is a deeper correction inevitable?

Bank Nifty: Down by 0.77%

The Bank Nifty opened the session in the red, dipping by 0.77% and ending on a downbeat note at 51,916.50. Similarly, the BSE Sensex followed suit, closing lower by 1.04% at 79,541.79, reflecting investor caution in the face of global uncertainties and domestic concerns.

In today’s market, there were no gainers in the sectorial front, but the metal sector stands out for its sharp decline. The sector took a blow, falling by 2.73% overall. Within this struggling sector, Hindalco Industries Ltd. faced the most significant setback, shedding -8.42% of its value. Meanwhile, Vedanta Ltd. wasn’t far behind, losing -3.39%.

Foreign Institutional Investors (FIIs) were notably net sellers in the Indian markets, reflecting their cautious outlook. With a buy value of ₹11,736.07 crore and a sale value of ₹16,624.84 crore, FIIs registered a net outflow of ₹4,888.77 crore.

Domestic Institutional Investors (DIIs) They were net buyers, with a buy value of ₹11,374.43 crore and a sale value of ₹9,587.73 crore, leading to a net inflow of ₹1,786.70 crore.

Bank Nifty

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

The gainers included Federal Bank with a 0.61% increase, State Bank of India with a 0.42% increase, and Bank of Baroda with a 0.17% increase.

On the other hand, the biggest losers in the sector included IndusInd Bank with a 1.83% decline, ICICI Bank with a 1.74% decline, AU Bank with a 1.28% decline, Kotak Bank with a 0.97% decline, and HDFC Bank with a 0.67% decline. These results suggest that most of the banking stocks not performed better for the day.

Gold and Silver Rate (INR) 7th November, 2024

Rupee Hits Record Low Again: What’s Fueling the Slide? 🌍💸

Rupee Dips to New All-Time Low of 84.37 Against USD
The Indian rupee hit a fresh record low on Thursday, closing at 84.37 per USD after a 6-paise decline. A combination of factors, including weak domestic equities and persistent foreign fund outflows, has put significant pressure on the rupee, sparking concerns for investors and the market.

1. Foreign Fund Outflows: Sustained FII outflows are adding to the rupee’s troubles as global investors pull back from Indian markets.
2. Rising Crude Oil Prices: Overnight gains in crude oil are weighing heavily on the rupee, pushing up import costs and widening the trade deficit.
3. Cautious Investors Await Fed Decision: Market players are awaiting the U.S. Federal Reserve’s meeting outcome, which could further impact the dollar and, by extension, the rupee.

How Low Could the Rupee Go?
At the interbank foreign exchange, the rupee opened at 84.26 and touched a high of 84.26 and a low of 84.38 during the session. This recent dip follows a 22-paise loss on Wednesday, setting up back-to-back record lows.

Dollar Index Eases, Offering Brief Respite
Although the rupee’s downward slide was cushioned by a softening dollar index, which was down by 0.22% to 104.86, this relief could be temporary. Any shifts in global currency markets might still impact the rupee’s trajectory.

Brent Crude’s Movement in Focus
The global oil benchmark, Brent crude, showed a minor 0.32% dip to $74.68 per barrel, a movement being closely watched. If oil prices rise again, the rupee could face even more pressure.

What Lies Ahead?
As we wait for the Federal Reserve’s policy announcement, all eyes are on whether the rupee will stabilize or continue to test new lows. The outcome of this meeting could shape the short-term future of the rupee, leaving investors and market watchers bracing for potential impacts.

Stocks Highlights

Apollo Hospitals Enterprise Ltd. saw its share price jump by 6.34% from its previous close of Rs 6,968.10, reaching a new 52-week high of Rs 7,409.95. Over the past three years, Apollo’s stock has outperformed the Nifty 100, returning an impressive 56.99% compared to Nifty’s 38.03%.

Market Sentiment: With robust financial performance, Apollo Hospitals appears well-positioned for continued growth.

Operational Costs: The company allocated 2.36% of operating revenue to interest expenses and 13.08% to employee costs in the year ending March 31, 2024.

Hindalco Industries Ltd. had a tough day, with its share price plunging by -8.42% from Rs 708.20 to Rs 648.60. This decline reflects a notable shift, as the company’s sales shrank by 3.12%, marking its first revenue contraction in three years.

• Technical Indicators: Despite the drop, a 50-day moving average crossover appeared yesterday, historically signaling an average price gain of 7.68% within 30 days over the past five years.
• Long-term Returns: Hindalco has still managed a solid three-year return of 49.85%, outperforming the Nifty 100’s return of 38.03%.

Advance Decline Ratio

Today, the advance-decline ratio was 0.61 and the market breadth was negative. The volatility index India Vix increased by 1.05 to settle at 15.03 and the FIIs were net sellers today.

DAILY MARKET ACTION
Advancers – 1051
Decliners – 1737
52Wk High – 108
52Wk Low – 7
High Band Hitters – 137
Low Band Hitters – 45
200d SMA – 23491
50d SMA – 25033
20d SMA – 24527

Top Gainers and Losers Stocks

The top gainers were Apollo Hospitals (+6.34%), SBIN (+0.42%), HDFC Life (+0.40%), and TCS (+0.15%).

The top losers were Hindalco (-8.42%), Trent (-6.12%), Grasim (-3.07%), Shriram Finance (-2.96%), and Adani Enterprises (-2.74%).

Top Gainers and Losers Sectors

The top losers were Metal (-2.73%), Pharma (-1.72%), Realty (-1.43%), Auto (-1.35%), and FMCG (-0.98%).

SECTORS – NOTABLE ACTION
METAL -2.73%
PHARMA -1.72%
REALTY -1.43%

Stocks Ban List

The Securities and Exchange Board of India (SEBI) has not included any stocks on the F&O ban list.

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.

GRANULES, MANAPPURAM, and ABFRL stock has the possibilities of entrance in the ban list.

Daily Pivots

As per the above pivots data, 23900 to 24600 is the Nifty 50 trading range.

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