An uncertain week for markets as US polls loom

This week brings significant uncertainty to the markets, with the outcome of the highly contested US presidential election expected on Wednesday. The following day will see interest rate decisions from both the US Federal Reserve and the Bank of England. Additionally, companies will begin releasing their second-quarter results, which could impact market performance. The vibrancy observed in last week's trading may struggle to continue.

Crude oil and gold prices are also under scrutiny as they await the election results and the Fed's decision. The identity of the new US president will have direct implications for international economic relations, particularly regarding conflicts in West Asia and Ukraine. While many market players in the US appear to favour a Donald Trump victory, his unpredictable nature could heighten uncertainty in economic and commercial matters.

Indian market

Foreign investors continue to pull back from the Indian market. If the market does not decline further, the desired pullback could shift from a rally to a correction. In the derivatives market, the Gift Nifty fell to 24,306 this morning, indicating that the Indian market is likely to open with significant losses.

On Friday, European markets rose, driven by the belief that lower job growth in the US might lead to reduced interest rates. The US market also posted strong gains, with the Dow Jones Industrial Average rising by 288.73 points (0.69%) to close at 42,052.19, the S&P 500 gaining 23.35 points (0.41%) to end at 5,728.80, and the Nasdaq climbing 144.77 points (0.80%) to close at 18,239.92. However, US futures are lower this morning as the election approaches.

Asian markets are slightly up today, although Japan is observing a market holiday. Investors are looking forward to potential stimulus announcements during the Chinese Parliament session that starts today.

On Friday, all sectoral indices in India closed with gains. The Nifty closed at 24,304.35, up 99 points (0.41%), after peaking at 24,368.25. The Bank Nifty rose 0.39% to finish at 52,673.90, and the Sensex gained 335 points (0.42%) to close at 79,724.12, having reached a high of 80,044.95.

Auto update

Expectations for better October sales bolstered auto stocks, with Mahindra & Mahindra up 3.59%. Other notable performers included Eicher, Bajaj, Tata, Hero, and TVS. Stocks such as Bharat Electronics and Bharat Heavy Electricals also saw good gains. Kitex, which has surged 195% over the past six months, rose by 10% to Rs 613. Cochin Shipyard increased by 4%, and shares in railway and realty companies also performed well.

While RBL Bank, IDFC First Bank, and Punjab National Bank showed strong gains, State Bank of India saw a slight decline. Rising crude oil prices impacted paint companies, including Asian Paints and Berger, while Reliance, ONGC, and MRPL gained. 

In October, foreign investors withdrew ₹1,13,859 crore from the cash market, although they invested ₹19,842 crore in IPOs. The momentary trade revival helped major indices end last week positively, but overall market uncertainty persists. Today, Nifty may find support at 24,285 and 24,265, while resistance is seen at 24,315 and 24,370. 

Gold falls

Gold prices fell by 2.5% over three days due to the uncertainty surrounding the US election and the Fed's decision, settling at $2,736.50 an ounce on Friday, and starting the day at $2,740. In Kerala, gold prices dropped by ₹560 to ₹59,080 on Friday, then fell by another ₹120 to ₹58,960 on Saturday. The dollar index closed at 104.28 on Friday but has since fallen to 103.80.

Crude oil prices experienced a slight increase over the weekend, with Brent crude at $74.17, WTI crude at $70.57, and UAE's Murban crude at $73.34 per dollar. Cryptocurrencies continued to decline, with Bitcoin falling over half a percent to below $68,500 and Ether dropping below $2,450. Industrial metals showed mixed results, with copper up 0.76% to $9,444.66 per tonne, while aluminum fell 0.67% to $2,600.17 per tonne. Tin, lead, and nickel saw gains, while zinc declined by 1.28%.

Market indicators (November 1, 2024)

- Sensex: 79,724.12 (+0.42%)
- Nifty50: 24,304.35 (+0.41%)
- Bank Nifty: 52,673.90 (+0.39%)
- Midcap 100: 56,496.05 (+0.68%)
- Smallcap 100: 18,794.90 (+1.03%)
- Dow Jones: 42,052.19 (+0.69%)
- S&P 500: 5,728.80 (+0.41%)
- Nasdaq: 18,239.92 (+0.80%)
- Dollar: ₹84.08
- Dollar Index: 103.89 (-0.39)
- Gold (oz): $2,736.50 (-$7.90)
- Gold (Pavan): ₹58,960 (-₹120)
- Crude (Brent): $74.17 (+$1.17)