Concerns surrounding the artificial intelligence (AI) sector led to a fresh downturn in the markets. Early declines in Asian markets, coupled with a drop in US futures tech stocks, ensured that the Indian market began the day in the negative. Both China and Japan saw significant losses in AI-related companies.
As stock prices continued to fall, gold surged above $4,000. Cryptocurrencies, which are considered alternative assets, also took a hit.
Meanwhile, a report highlighting that US companies reached the highest level of layoffs in 22 years in October has raised worries about economic growth. The combination of inflation and economic stagnation has fueled fears that the economy might slip into stagflation.
In the derivatives market, Nifty closed at 25,520.00 on Thursday night. It dipped slightly to 25,490 this morning but showed signs of recovery. These movements signal that the Indian market is expected to open significantly lower today.
European markets closed in the red on Thursday, driven primarily by company results. The weak performance in the US and Chinese markets, along with downgraded earnings expectations from the beverage giant Diageo, saw its stock drop by 6.5%. The Bank of England and Norway's central bank held their interest rates steady, leading to a rise in both the euro and the pound.
The weakness in the AI sector persists, with layoffs in major companies reaching concerning levels. On Thursday, the US market took a hit.
Stocks of major tech companies such as Nvidia, Microsoft, Palantir, Broadcom, AMD, Qualcomm, Oracle, and Intel fell between 3% and 7%.
A private agency reported that US companies announced 153,000 layoffs in October, marking the highest level in 22 years. This has raised concerns about the economy. The official statistics are not yet available due to the government shutdown. Compared to September, the number of layoffs was up by 175%, and it’s the highest for October in two decades.
Tesla’s Elon Musk received board approval for a $1 trillion payout plan, with shareholders voting overwhelmingly in favor. Some funds, however, opposed the proposal. Under this plan, Musk's stake in Tesla could rise from 12% to 25%, depending on specific targets. For Tesla to reach a market cap of $8.3 trillion, these objectives must be met. Musk is already the richest person in the world.
On Thursday, the Dow Jones Index closed 398.70 points (0.84%) lower at 46,912.30. The S&P 500 dropped 75.97 points (1.12%) to close at 6720.32. The Nasdaq Composite fell by 445.81 points (1.90%) to end at 23,053.99.
US Futures opened with marginal gains. The Dow is up 0.10%, while the S&P 500 rose 0.08%. The Nasdaq was down 0.06%.
Asian markets are in turmoil today. The South Korean Kospi dropped 1.5%, while Japan’s Nikkei fell by 2.2%. SoftBank’s stock plunged by 8%. The Hong Kong index declined by 0.75%, and the Chinese index was down by 0.30%.
The Indian market began the day with only a slight loss, but attempts to move upwards yesterday failed. Foreign investors continued selling, and local funds also pulled out, leading to a second consecutive day of losses. Nifty lost 170 points, and Sensex dropped 535 points from its early high.
Key indices showed relatively minor losses. The Mid Cap 100 index fell by 1%, while the Small Cap 100 index plunged by 1.5%.
Reliance, Asian Paints, and Ultratech Cement saw notable gains yesterday. Meanwhile, Grasim and Hindalco, both from the Aditya Birla Group, were hit hard by announcements regarding rights issues. The resignation of the CEO of Opus Paints raised concerns for Grasim, and additional capital investment needs for Hindalco pressured their stocks. Blue Star’s lower-than-expected sales also impacted other home appliance companies.
Metals, media, real estate, and consumer durables sectors faced major setbacks, while the auto sector showed no significant losses.
On Thursday, Nifty closed 82.95 points (0.34%) lower at 25,509.70, while Sensex dropped 148.14 points (0.18%) to close at 83,311.01. Bank Nifty ended 272.80 points (0.47%) lower at 57,554.25. The Mid Cap 100 index closed at 59,468.60, down 568.60 points (0.95%), and the Small Cap 100 index closed at 18,105.00, down 259.90 points (1.39%).
The breadth of the market remained negative with 1,142 stocks advancing and 3,086 stocks declining on BSE. On NSE, 794 stocks gained, while 2,304 stocks fell.
NSE’s 73 stocks hit their 52-week highs, while 162 stocks reached their 52-week lows. 71 stocks were on the upper circuit, and 81 were on the lower circuit.
Foreign institutional investors continued their selling spree, offloading ₹3,263.21 crore worth of stocks in the cash market on Thursday. Domestic funds purchased ₹5,283.91 crore worth of stocks.
Technical indicators suggest that if Nifty drops below 25,300, it could find support at 25,485, while resistance could be seen at 25,700.
Suryoday Small Finance Bank saw its net interest income drop by 13.9%, leading to a 32.9% fall in profits, while its non-performing asset ratio declined.
Bajaj Housing Finance reported a revenue increase of 17.4%, with net profit rising by 18%. Asset quality remained stable, although provisions rose to ₹50 crore.
Crompton Greaves Consumer Electricals reported a modest revenue increase of 1%, but profits plummeted by 43%.
Axon Noble’s revenue fell by 15%, while operational profits dropped by 24.8%. The company reported a loss of ₹1,682 crore, excluding a one-time income of ₹1,874 crore.
Aster DM Healthcare saw its revenue grow by 10.2%, with profit rising by 13.6% to ₹110 crore.
Apollo Hospitals' revenue grew by 12.8%, reaching ₹6,303 crore, while profit surged by 25%, reaching ₹494 crore.
Gold prices spiked to $4,020 per ounce on Thursday but later settled close to the previous day’s closing price. Despite gold's surge, it faced resistance from falling dollar indices and decreased returns from bonds. Gold reached $3,978.20 per ounce by close and is currently hovering around $4,005.
Gold prices remained stable above $4,015 during the holiday period.
In Kerala, the price of 22-carat gold rose by ₹800 twice on Thursday, reaching ₹89,880 per pavan.
Silver closed at $48.16, with a slight rise to $48.01 in the morning.
Platinum stood at $1,526, while palladium reached $1,353, and rhodium closed at $7,850.
Industrial metals had a mixed performance on Thursday. Copper rose by 1.13%, closing at $10,723 per ton. Aluminum fell by 0.19%, ending at $2,844.50 per ton. Zinc and lead both declined, while nickel and tin saw upward movement.
In global markets, rubber prices remained unchanged at $168.20 per kilogram. Cocoa dropped by 3.28% to $6,186 per ton, and coffee fell by 4.75%. Tea prices remained stable, while palm oil rose by 0.97%.
The Dollar Index fell by half a percent to close at 99.73 on Thursday. It rose slightly to 99.77 this morning.
In the currency markets, the US dollar weakened. The euro rose to $1.1536, and the pound increased to $1.3122. The Japanese yen weakened to 153.16 per dollar.
US 10-year Treasury bonds saw a rise in value, with yields falling to 4.689% on Thursday.
On Thursday, the US dollar fell by ₹0.05, closing at ₹88.61. The Reserve Bank of India continues to intervene in the currency market.
China's currency rose to 7.12 yuan per dollar.
Crude oil prices saw minor fluctuations but ended without significant change. Brent crude rose slightly to $63.62 per barrel on Thursday, settling at $63.57 this morning. WTI crude stood at $59.63, while Marban crude closed at $65.29. Natural gas prices rose slightly to $4.39.
Cryptocurrencies continued their decline yesterday. Bitcoin is trading at $101,250 this morning, while Ether hovers around $3,300. Solana dropped to $154.