Market cautiously optimistic despite woes

Today, the Indian market is cautiously optimistic for a rebound, despite ongoing worries and uncertainties. The critical question remains whether selling pressure, particularly from foreign investors, will continue to escalate. While foreign market cues are negative, some positive developments regarding India-China relations offer a glimmer of hope. A strong display of leadership from Prime Minister Narendra Modi could enhance India’s negotiating power on the global stage.

The International Monetary Fund (IMF) has projected a slowdown in India’s GDP growth this year. Goldman Sachs also anticipates a dip in growth during the second and third quarters. This slowdown is affecting consumer goods and automotive companies, which could impact the market in the coming months.

In the last trading session, the US market experienced a sharp decline, which influenced Asian markets to start lower today. However, some recovery was noted as the day progressed.

In the derivatives market, the Nifty closed at 24,496 on Wednesday night and climbed to 24,510 this morning, suggesting that the Indian market may open with gains today.

European markets also ended lower on Wednesday. Although Deutsche Bank reported better-than-expected profits, concerns over ongoing legal issues kept its shares down, along with losses from companies like Volvo, AxoNobel, and L'Oréal.

The US markets fell sharply on Wednesday due to political and economic uncertainties. Kamala Harris is leading in new polls, prompting increased campaigning from Trump supporters around budget deficits, debt, and rising interest rates. The yield on the ten-year Treasury note reached approximately 4.25%.

The Dow and S&P indices fell for the third consecutive day, with the Nasdaq dropping 1.6%. Major tech stocks, including Apple, Nvidia, MetaPlatforms, Netflix, and Amazon, saw declines of over 2%. However, Tesla’s better-than-expected results led to a 12% increase in its shares. Conversely, McDonald's shares fell by 5% due to food safety concerns.

Wells Fargo has forecasted a challenging outlook for stocks, predicting that the S&P index may drop to the 5,300-5,500 range by year-end, down from 5,800 yesterday. Nevertheless, the bank expects a recovery next year.

The Dow Jones Industrial Average closed down 409.94 points (0.96%) at 42,514.95, while the S&P fell 53.78 points (0.92%) to finish at 5,797.20. The Nasdaq closed at 18,276.65, down 296.48 points (1.60%).

US futures are mixed this morning, with the Dow down 0.09%, the S&P up 0.21%, and the Nasdaq up 0.54%. The yield on the US 10-year Treasury note has decreased to 4.248%.

Asian markets, after starting lower, have shown gains, with Japan's Nikkei index rising by 0.56%. The Chinese market also opened higher.

In India, trading began with losses on Wednesday, but the market could not sustain its gains, ending slightly down. Major indices recorded minor losses, while mid-cap and small-cap indices closed in the green. The broader market showed more positive movement overall.

IT companies performed well yesterday, with Coforge rising by 11.11% and Persistent up by 10.94%. However, the pharma, healthcare, and auto sectors faced declines.

On Wednesday, foreign investors sold a net ₹5,684.63 crore in the cash market, bringing total foreign sales for the month to ₹92,142.97 crore—a new record. Domestic investors, however, purchased a net ₹6,039.90 crore worth of shares, with total monthly purchases reaching ₹89,311.07 crore.

Overall, 1,632 shares advanced while 1,150 shares declined on the NSE. The BSE recorded 2,096 gainers against 1,827 decliners.

Yesterday, the Sensex fell by 138.74 points (0.17%) to close at 80,081.98. The Nifty closed down 36.60 points (0.15%) at 24,435.50, and the Bank Nifty was down 18.15 points (0.04%) at 51,239.00. The midcap index rose by 0.64% to close at 56,533.55, while the smallcap index gained 1.25% to finish at 18,286.20.

The persistent selling by foreign investors continues, and all expected support levels have been breached. Despite the lacklustre earnings outlook, some bulls remain hopeful for a recovery. Today, the Nifty may find support at 24,385 and 24,330, while resistance levels are seen at 24,560 and 24,610.

Gold saw a decline

Gold, which recently hit record highs, has seen a decline due to profit-taking and concerns over rising interest rates, alongside a stronger dollar. However, many believe this downward trend will be short-lived, with a mid-term target of $3,000 per ounce still in sight. Bob Haberkorn, a senior strategist at RJO Futures, predicts that gold will reach $2,800 later this week.

On Wednesday, gold peaked at $2,758.37 per ounce before closing at $2,715.80. It has since risen to $2,728 in early Asian trading, while the December futures price fell to $2,772.60. In Kerala, gold prices rose by ₹320 to ₹58,720, although a drop is expected today.

Silver closed at $33.74 per ounce, while the dollar index increased to 104.43. The Indian rupee held steady at ₹84.08 against the dollar.

Crude oil prices fell by 1.5% to $74.96 on Wednesday but have increased by 1% to $75.75 this morning. WTI crude is at $71.58, and UAE's Murban crude is priced at $74.91.

Cryptocurrencies also fell again, with Bitcoin dropping 1% to around $66,500 and Ether falling 4% to below $2,520.

Industrial metals showed mixed results yesterday, with copper falling 1.33% to $9,363.85 per tonne, while aluminium rose 1.47% to $2,672.90 per tonne. Tin and zinc also saw slight gains, but nickel and lead experienced declines.

Market indicators

- Sensex: 80,081.98 (-0.17%)
- Nifty50: 24,435.50 (-0.15%)
- Bank Nifty: 51,239.00 (-0.04%)
- Midcap 100: 56,533.55 (+0.64%)
- Smallcap 100: 18,286.20 (+1.25%)
- Dow Jones: 42,514.95 (-0.96%)
- S&P 500: 5,797.42 (-0.92%)
- Nasdaq: 18,276.65 (-1.60%)
- Dollar ($): ₹84.08 (unchanged)
- Dollar Index: 104.43 (+0.35)
- Gold (oz): $2,715.80 (-$33.60)
- Gold (Pavan): ₹58,720 (+₹320)
- Crude (Brent): $74.96 (-$1.08)