Inflation, corporate earnings in focus as markets brace for volatility

The market is starting the week with a lack of enthusiasm, especially as the retail inflation figures are expected to be released on Tuesday. Foreign investors continue to sell off their holdings.

The retail inflation report due on Tuesday is likely to show the highest inflation rate in recent memory. At the same time, the industrial production figures might not show a significant improvement. On Wednesday, the US inflation figures will be released, followed by India’s wholesale inflation and foreign trade data on Thursday.

Today, Britannia, Hindalco, and ONGC will announce their second-quarter results, but market expectations are low, so the results may be disappointing.

An analysis of 1,353 companies that reported earnings up to last week reveals a 0.6% decline in profits, compared to a 47.4% profit increase in the same quarter last year. This follows a 1.6% profit growth in the first quarter. These figures suggest that the market correction may persist.

In the derivatives market, the Nifty closed at 24,117 on Friday and climbed slightly to 24,130 this morning, indicating a potential loss at the start of today’s trading session.

Global markets:

European markets closed lower on Friday. In Germany, Chancellor Olaf Scholz dismissed the coalition leader’s finance minister, and the government is facing difficulties. It’s expected that Germany, which is nearing recession, may head towards elections.

In the US, markets continued to rally following Trump’s victory. The Dow Jones hit a record high of 44,157.29, S&P 500 reached 6,012.25, and the Nasdaq closed at a record 19,318.76. Over the course of the week, the Dow rose 4.61%, the S&P gained 4.66%, and the Nasdaq jumped 5.74%. The Russell 2000, which tracks smaller companies, saw an 8.57% increase.

Tesla, backed by Trump ally Elon Musk, saw its shares rise by 8% on Friday, with the company’s market value surpassing $1 trillion again after a 30% rise in the past week.

The US stock indices saw the following movements on Friday. The Dow Jones rose by 259.65 points (0.59%) to close at 43,988.89. The S&P 500 gained 22.44 points (0.38%) to end at 5,995.54. The Nasdaq increased by 17.32 points (0.09%) to finish at 19,286.78. US futures are up today, with the Dow, S&P, and Nasdaq all showing slight gains.

US 10-year Treasury yields rose to 4.306%.

Asian markets are lower today, with Japan’s Nikkei initially rising by 0.20% but later turning negative. Inflation in China remains low, which is causing concern.

Indian market

The Indian market fell for the second consecutive day, with foreign investors continuing to sell and second-quarter results generally falling short of expectations.

Between November 1st and 8th, foreign investors sold shares worth Rs 19,994 crore in the cash market, following sales of Rs 1.13 lakh crore in October. In the first six days of November, net sales, excluding IPO investments, amounted to Rs 13,401 crore.

The Nifty closed down 51.15 points (0.21%) at 24,148.20, while the Sensex lost 55.47 points (0.07%) to close at 79,486.32. The Bank Nifty fell by 0.68% (355.30 points) to end at 51,561.20. The mid-cap index fell 1.33% to 56,352, and the small-cap index dropped by 1.70% to 18,445.60.

Among sectors, IT, FMCG, healthcare, pharma, and consumer durables saw gains on Friday, while sectors such as realty, PSU banks, oil-gas, metals, media, and finance ended lower.

Shares of Federal Bank closed slightly lower at Rs 207.93, which is a record high. Kitex Garments rose by 2.5% to Rs 635, while Cochin Shipyard saw a 5% drop to Rs 1,447.65. Muthoot and Manappuram shares were down due to volatility in gold prices.

Foreign investors sold shares worth Rs 3,404.04 crore on Friday, while domestic investors bought shares worth Rs 1,748.44 crore.

The market correction appears to be continuing. The Nifty has support levels at 24,000-23,800. If these are breached, the next support level is at 23,500. The immediate resistance levels for the Nifty are at 24,250 and 24,295.

Gold update

Gold prices initially fell after Trump’s victory but rebounded on Thursday before dropping again on Friday. On Friday, gold fell by $22.40 to settle at $2,684.70 an ounce. This morning, the price further dropped to $2,677. In Kerala, the price of gold increased by Rs 680 to Rs 58,280 on Friday, but fell by Rs 80 to Rs 58,200 on Saturday. Silver fell to $31.31 an ounce.

The dollar index rose by 0.55% to 105.00 on Friday and is at 104.96 this morning. The rupee remained weak, with the dollar gaining ₹0.01 to close at Rs 84.38.

Crude oil prices fell over the weekend amid expectations of a calming in the West Asian conflict and weak demand from China. Brent crude dropped by 2% to $73.87, while WTI crude was at $70.01 and UAE Murban crude at $72.92.

Cryptocurrencies, which surged after Trump’s victory, continued to rise. Bitcoin set a new record at $81,067.48, later dropping to around $80,800. Over the weekend, $2.8 billion in open interest bets were placed on Bitcoin’s price breaking $90,000 this month, with predictions for it to reach $200,000 by the start of Trump’s administration. Ether, however, saw a slight decline after reaching $3,250.

Industrial metals fell due to the strong dollar. Copper dropped 2.36% to $9,302.45 per tonne, and aluminium fell 2.75% to $2,620.25 per tonne. Tin, lead, nickel, and zinc also saw losses.

Market indicators:

Sensex: 79,486.32 (-0.07%)
Nifty: 24,148.20 (-0.21%)
Bank Nifty: 51,561.20 (-0.68%)
Mid Cap Index: 56,352.00 (-1.33%)
Small Cap Index: 18,445.60 (-1.70%)
Dow Jones: 43,988.99 (+0.59%)
S&P 500: 5,995.54 (+0.38%)
Nasdaq: 19,286.78 (+0.09%)
Dollar (₹): 84.38 (+₹0.01)
Dollar Index: 105.00 (+0.49%)
Gold (oz): $2,684.70 (-$22.40)
Gold (Pavan): ₹58,280 (+₹680, Saturday ₹58,200 -₹80)
Crude Oil (Brent): $73.87 (-$1.68)