Market struggles as Hyundai weakness and US rate concerns weigh in

The stock market continues to struggle under significant downward pressure, with no clear catalyst for a rebound. Weakness from Hyundai Motor India this morning could further hinder market performance. The decline in Western markets yesterday and the dip in Asian markets today are sending negative signals. Continued selling by foreign investors and a strengthening US dollar are also weighing on the market.

In the derivatives market, the Gift Nifty closed at 24,806 on Monday night but has dropped to 24,795 this morning, suggesting that the Indian market may open slightly higher today.

European markets closed lower on Monday, with German and French indexes each falling by 1%. In the US, markets had a mixed day. Signals from Federal Reserve officials indicating potential delays in interest rate cuts disappointed investors, causing the Dow to drop by 0.8% and the S&P to decrease by 0.18%. However, the Nasdaq saw a slight increase, driven by record highs for Nvidia and Apple. Nvidia rose by 4.14%, while Apple reached a market capitalisation of $3.52 trillion.

US futures show small losses this morning, with the Dow down 0.12%, the S&P down 0.17%, and the Nasdaq down 0.26%. The yield on US 10-year Treasury notes fell to 4.19%.

Asian markets are experiencing significant declines this morning, with markets in Japan, Australia, and South Korea each dropping over 1.25%. The Chinese market also started lower.

The Indian market began positively on Monday but quickly turned to losses, struggling to recover. Midcap and smallcap stocks were the biggest losers, with both indices down by 1.5%. 

Most sectors faced declines, including IT, FMCG, Oil & Gas, Realty, Media, Metals, Public and Private Banks, Healthcare, and Pharma. The auto sector was the only gainer. Tata Consumer Products saw a sharp decline, falling as much as 10% after brokerages lowered their target price following disappointing second-quarter results. In IT, Coforge dropped 5.55%, Persistent fell 4.54%, and Emphasis decreased by 3.77%. 

The real estate sector also suffered, with stocks like Godrej, Phoenix, Shobha, Lodha, and Prestige losing over 2%. On Monday, foreign investors sold a net ₹2,261.83 crore in the cash market, bringing their monthly sales total to ₹82,479.73 crore—a record for foreign sales in a month. Domestic funds and institutions, however, made net purchases of ₹3,225.91 crore yesterday, contributing to their monthly total of ₹77,402.11 crore.

Overall market breadth was negative, with only 697 shares advancing compared to 2,128 shares declining on the NSE. The BSE saw 1,102 shares rise and 2,948 fall.

On Monday, the Sensex closed down by 73.48 points (0.09%) at 81,151.27, while the Nifty lost 72.95 points (0.29%) to finish at 24,781.10. The Bank Nifty declined by 131.50 points (0.25%) to end at 51,962.70. The mid-cap index fell by 1.66% to close at 57,677.70, and the small-cap index was down 1.47% at 18,797.40.

The market lacks direction, and if the Nifty falls below 24,700, the next support level will be 24,500. Today, Nifty may find support at 24,700 and 24,625, with resistance at 24,930 and 25,000.

Uncertainty surrounding US interest rate policy and government borrowing has led to fluctuations in gold prices, which recently hit an all-time high. Some speculate that a Kamala Harris presidency could increase the deficit, potentially raising interest rates and pushing up the dollar, thereby lowering the price of US bonds. This speculation caused gold prices to rise to $2,741 per ounce in the morning before falling sharply. Gold closed at $2,719.90 per ounce on Monday, though it rose to $2,729 in Asian trading this morning, with December holiday prices dropping to $2,755.

Gold rises

In Kerala, gold prices increased by ₹160 to reach a record ₹58,400, with expectations for further increases. Silver prices fell to $33.85 after briefly exceeding $34 per ounce.

The dollar surged on Monday, with the dollar index closing at 104.01 and currently at 103.95. The Indian rupee remained steady at ₹84.07, with the Reserve Bank actively involved in the market.

Crude oil prices experienced volatility, with Brent crude closing 1.5% higher at $74.29 on Monday but falling to $73.94 this morning. WTI crude is priced at $70.27, and UAE's Murban crude is at $73.99.

Cryptocurrencies are down, with Bitcoin at $67,450 and Ether dropping to $2,645. Although China cut interest rates yesterday, most industrial metals declined. Copper fell by 0.87% to $9,420.59 per tonne, while aluminum rose by 0.21% to $2,595.50 per tonne. Tin, nickel, and lead saw slight declines, while zinc increased by 1.33%. 

Market indicators

- Sensex: 81,151.27 -0.09%
- Nifty50: 24,781.10 -0.29%
- Bank Nifty: 51,962.70 -0.25%
- Mid Cap 100: 57,677.70 -1.66%
- Small Cap 100: 18,797.40 +0.06%
- Dow Jones: 42,931.60 -0.80%
- S&P 500: 5,853.98 -0.18%
- Nasdaq: 18,540.01 +0.27%
- Dollar (₹): 84.07
- Dollar Index: 104.01 +0.52
- Gold (oz): $2,719.90 -$1.90
- Gold (Pavan): ₹58,400 +₹160
- Crude (Brent): $74.29 +$1.26