Correction expected in market amid slow GDP and auto sales decline

The market has previously bounced back strongly when it seemed poised for a correction, but this time a correction appears unavoidable. The forecast for slower GDP growth in the second quarter and declining auto sales are contributing factors. There are also concerns about decreasing bank profitability. Analysts suggest the market might recover if a stimulus, such as an interest rate cut, is announced during Diwali.

Hyundai's IPO took place yesterday, primarily supported by financial institutions, while retail investors showed little interest. In the grey market, the share premium is less than 1%.

Infosys reported results that fell short of expectations, with slowed revenue and profit growth and reduced profit margins. However, they received more orders, which could benefit future quarters and have raised income expectations.

Wipro’s results exceeded expectations, with profits rising by 21% despite a revenue drop. The company also announced a bonus issue.

In the derivatives market, Gift Nifty closed at 24,758 on Thursday night but fell to 25,740 this morning, indicating a significant loss for the Indian market today.

European markets rallied on Thursday, aided by the European Central Bank (ECB) cutting interest rates by 0.25%. This was the third reduction this year, and analysts believe further cuts may come in December. Retail price inflation in the eurozone eased to 1.8% in September, with ECB President Christine Lagarde suggesting that inflation is more likely to decrease than increase.

US markets had a mixed day. The Dow Jones hit a new record high, while the S&P reached an intraday high but closed marginally lower. The Nasdaq saw a slight rise, benefiting from gains in chip makers like Nvidia.

US retail sales increased by 0.4% in September, surpassing expectations of 0.3%. Weekly unemployment claims fell sharply to 241,000, suggesting positive signals for potential Fed interest rate cuts.

The Dow Jones Industrial Average rose 161.35 points (0.37%) to close at 43,239.10. The S&P 500 dipped by 1 point (0.02%) to 5,841.47, while the Nasdaq gained 6.53 points (0.04%) to finish at 18,373.60.

US futures are showing slight gains this morning, with the Dow up 0.03%, S&P up 0.08%, and Nasdaq up 0.21%. The yield on US 10-year Treasury bonds dropped to 4.091%.

Asian markets are mixed today. The Japanese market rose by 0.30%, while the Australian market fell by 0.70%.

In China, the market reacted negatively to a new housing sector package, with realty stocks dropping by up to 8%. Chinese stocks are trading lower today.

Indian markets closed sharply lower on Thursday after a brief positive start, with all sectors except IT suffering losses. The realty index fell by 3.76%, and the auto index dropped by 3.54%. Weak indicators, including industrial production, suggest that second-quarter GDP growth will be below expectations. Vehicle sales, consumer durables, and real estate have not picked up despite the festive season, and analysts anticipate further declines in bank profitability.

Auto sector disappoints

Bajaj Auto shares fell by 13.11% due to disappointing second-quarter profits and weak festive season sales. Other automakers also struggled, with Hero MotoCorp down 3.39%, TVS Motors down 3.43%, and others like Maruti and Mahindra & Mahindra experiencing declines.

Foreign investors increased their selling on Thursday, netting a sale of ₹7,421.40 crore, double the previous day's figure. October's total foreign sales reached ₹74,732.20 crore, a record for monthly foreign sales. Domestic funds and institutions, however, made net purchases of ₹4,979.83 crore.

On Thursday, 722 stocks rose while 2,050 fell on the NSE. The BSE saw 1,219 gainers against 2,754 decliners.

Yesterday, the Sensex closed down by 494.75 points (0.61%) at 81,006.61. The Nifty fell by 221.45 points (0.89%) to end at 24,749.85. The Bank Nifty closed down by 512.25 points (0.99%) at 51,288.80. The midcap index dropped by 1.66% to close at 58,465.95, while the smallcap index fell by 1.24% to 19,065.95.

Gold rises

In the commodities market, gold surpassed $2,700, closing at $2,693.50 on Thursday. It reached as high as $2,697.90 and is at $2,706 this morning. Gold prices in Kerala increased by ₹160 to a record high of ₹57,280.

Silver rose to $31.70 an ounce, and the dollar strengthened, with the dollar index closing at 103.83 before falling to 103.77 this morning. The Indian rupee weakened as well, closing at ₹84.07, up by 7 paise.

Crude oil prices remained mostly unchanged, with Brent crude closing at $74.45 and rising to $74.67 this morning.

Cryptocurrencies fell, with Bitcoin dropping below $67,350 and Ether down to $2,600.

In the metal market, the perception that China’s recent housing sector package is insufficient led to declines. Industrial metals like copper and aluminium fell, with copper down 0.36% at $9,384.75 per tonne, and aluminium down 1.18% at $2,553.50 per tonne.

Market indicators

- Sensex: 81,006.61 -0.61%
- Nifty50: 24,749.85 -0.89%
- Bank Nifty: 51,288.80 -0.99%
- Midcap 100: 58,465.95 -1.66%
- Smallcap 100: 19,065.95 -1.24%
- Dow Jones: 43,239.10 +0.37%
- S&P 500: 5,841.47 -0.02%
- Nasdaq: 18,373.60 +0.04%
- Dollar (₹): 84.07 +₹0.07
- Dollar Index: 103.83 +0.24
- Gold (oz): $2,693.50 +$18.30
- Gold (Pavan): ₹57,280 +₹160
- Crude (Brent): $74.45 +$0.25