Market struggles to recover as US decline dampens investor sentiment

The market continues to show weak performance, with no signs of foreign investors returning. Companies’ second-quarter results have been disappointing, and there are few indications that the third-quarter results will be any better. Chartists are predicting that the market, which has been on a downward trend for six consecutive days, will likely continue to decline, with the Nifty potentially testing the 23,200-23,000 zone.

On the derivatives front, the Gift Nifty closed at 23,445 on Thursday evening. It briefly touched 23,510 this morning before falling back, suggesting that the Indian market may remain on a downward trajectory today.

The US market also ended the previous week on a low, dampening global sentiment. Stocks weakened on Thursday and Friday after the Federal Reserve Chairman stated that there was no rush to cut interest rates. Meanwhile, Tesla’s CEO Elon Musk, who is also leading a new department to streamline the US government, sparked concerns about a potential setback for the market and economy by suggesting a reduction in government costs by $2 trillion. As a result, the Dow Jones, which had risen to 44,486.70, closed the week at 43,444.99, marking a sharp decline.

On Thursday, the Dow Jones Industrial Average fell by 207.33 points (0.47%) to close at 43,750.86. The S&P 500 lost 36.21 points (0.60%), closing at 5,949.17, and the Nasdaq dropped 123.07 points (0.64%), finishing at 19,107.65. On Friday, the downturn deepened, with the Dow falling 305.87 points (0.70%) to 43,444.99. The S&P lost 78.55 points (1.32%) to close at 5,870.62, and the Nasdaq dropped 427.53 points (2.24%), settling at 18,680.12.

Tech stocks will likely be in focus this week, particularly with Nvidia's third-quarter results expected on Wednesday. Analysts are anticipating significant growth, with sales expected to increase by 81% and earnings per share by 85%. Nvidia, now the world’s most valuable company, has seen a 194.75% gain this year and a remarkable 2684% increase over the past five years.

Global markets

In the US, futures are showing slight upward movement today, with the Dow up by 0.09%, the S&P up 0.27%, and the Nasdaq up 0.59%. Meanwhile, the yield on US 10-year Treasuries remains high at 4.432%, suggesting that interest rates are likely to stay elevated for the time being.

European markets ended lower on Friday after a strong performance on Thursday, marking their fourth consecutive week of declines. British luxury brand Burberry saw a 22% jump in shares after announcing job cuts to address falling sales. In contrast, shares in Bavarian Nordic dropped by 17% after its third-quarter earnings came in below expectations.

Asian markets are showing more positive movement today. Japan’s Nikkei index rose by 0.62%, while South Korea’s index increased by 1.1%.

Indian market

On Thursday, Indian markets seemed to be testing whether the correction phase could lead to a potential rebound. While major indices were marginally lower, mid-cap and small-cap stocks performed well. The Bank Nifty, along with stocks in financials, autos, real estate, and media, saw gains. However, the FMCG sector continued to struggle, holding back the overall market performance.

The total market capitalization of BSE-listed companies rose by Rs 70,000 crore. Investment experts suggest that this could be a good time to buy quality stocks at lower prices, with hopes that corporate profitability will improve in the fourth quarter.

The broader market saw a favourable up-down ratio, with 2,077 stocks rising on the BSE compared to 1,887 that fell. On the NSE, there were 1,533 gainers and 1,282 losers. 

Thursday's session began on a slight downturn, but the market saw some rallying before losing ground again. The Nifty reached a high of 23,675 before falling to 23,484. The Sensex peaked at 78,055 but closed at 77,424.

The Nifty ended the day 26.35 points (0.11%) lower at 23,532.70, while the Sensex lost 110.64 points (0.14%) to close at 77,580.31. Bank Nifty gained 0.18% (91.20 points) to close at 50,179.55. The mid-cap index rose by 0.45%, closing at 54,043.10, and the small-cap index gained 0.81%, closing at 17,601.05.

In individual stocks, Federal Bank saw a decline of 1.16% to Rs 197.07, while South Indian Bank dropped by 0.40% to Rs 22.75. CSB Bank fell 2.57% to Rs 300.80. On the other hand, Dhanalakshmi Bank rose 2.25% to Rs 31.79, Kitex Garments surged 5% to Rs 608.55, and Cochin Shipyard climbed to Rs 1,343.95 before closing at Rs 1,319.90.

Foreign investors sold a net Rs 1,849.87 crore in the cash market on Thursday, while domestic institutional investors bought shares worth Rs 2,481.81 crore. So far in November, foreign investors have withdrawn Rs 22,420 crore from the Indian stock market. However, CLSA, a foreign brokerage, indicated that it plans to reduce its investment in China and increase its exposure to India, noting that Indian stocks are currently reasonably priced.

The Nifty closed below its 200-day exponential moving average, falling 2.55% last week. If the downtrend continues, the Nifty may find support around the 23,200 level, with further support at 23,490 and 23,445. Resistance levels are seen at 23,640 and 23,685.

Gold update

Gold prices have been showing signs of recovery after a decline following Trump's victory. Although the price of gold fell slightly by 0.30% ($7.60) on Thursday, closing at $2,565.70 per ounce, it managed to climb back later. Gold ended Friday down by $2.40 at $2,563.30, but today the price has risen by 1.24% to $2,595 per ounce.

In India, the price of gold fell by Rs 880 to Rs 55,480 per gram on Thursday, marking its lowest level since September 21. On Friday, the price rose slightly to Rs 55,560, before falling again by Rs 80 on Saturday to Rs 55,480. It is expected to rise again today.

Silver prices remain strong, trading at $30.55 per ounce.

The dollar index continues to rise, closing at 106.69 on Friday. This morning, it stands at 106.63. As a result, the Indian rupee is struggling, with the dollar climbing to a record high of Rs 84.40 on Thursday.

Crude oil prices were lower over the weekend. Brent crude fell 2% to $71.04 on Friday, but has since bounced back slightly to $71.23. WTI crude stands at $67.09, while UAE’s Murban crude is priced at $70.15 per barrel. Analysts believe that US policies under Trump could lead to an increase in oil production in the US.

 Cryptocurrency markets ended the weekend mixed. Bitcoin climbed as high as $91,600 before dipping to around $90,300 this morning. Ether is trading at $3,110.

Industrial metals performed well late last week. On Friday, copper rose 0.22% to $8,881.72 per tonne, while aluminium surged by 5.35% to $2,656.14. Zinc rose by 3.53%, and nickel gained 1.02%. Lead, however, was flat, and tin dropped by 1.66%.

Market indicators (November 14)

- Sensex: 77,580.31 (-0.14%)
- Nifty50: 23,532.70 (-0.11%)
- Bank Nifty: 50,179.55 (+0.18%)
- Mid Cap 100: 54,043.10 (+0.45%)
- Small Cap 100: 17,601.05 (+0.81%)

Market indicators (November 15)

- Dow Jones: 43,444.99 (-0.70%)
- S&P: 5,870.62 (-1.32%)
- Nasdaq: 18,680.12 (-2.24%)
- Dollar index: 106.69 (-0.17)
- Gold (oz): $2,563.30 (-$2.40)
- Gold (Pavan): ₹55,560 (+₹80)
- Crude (Brent): $71.04    +$01.31