Q2 results disappoint, FII outflow rises to Rs. 1 lakh crore

The stock market is facing challenges because the result didn’t come as expected and continued selling by foreign investors. Additionally, the central government's capital expenditure is expected to fall short of budget estimates, which is adding to the market's woes. Rating agency Crisil predicts that revenue growth for companies will be low in the second quarter.

On a more positive note, Nvidia has announced a partnership with Reliance and major IT firms to develop an Indian intelligence infrastructure. The government has also approved railway projects worth Rs 7,000 crore in Andhra Pradesh and Bihar and allocated Rs 1,000 crore to support startups in the space sector. These initiatives could signal potential improvements ahead.

In the derivatives market, Gift Nifty closed at 24,459 on Thursday night but dipped slightly to 24,455 this morning, suggesting that the Indian market will open without significant changes today.

Global market scenario

European markets saw modest gains on Thursday, with French car manufacturer Renault rising by 7% and British bank Barclays climbing by 5% after better-than-expected third-quarter results.

In the US, markets experienced mixed results. The Dow Jones fell for the fourth consecutive day, while the S&P 500 rose after three days of losses, mainly driven by a 22% surge in Tesla shares following CEO Elon Musk's forecast of 20-30% growth in vehicle sales for next year. However, stocks like IBM and Boeing weighed down the Dow.

Political and economic uncertainties persist in the US market. Recent polls showing Donald Trump leading in key states have cheered some market participants, despite generally weak company results. Many believe the current momentum may be hard to maintain.

On Thursday, the Dow Jones fell by 140.59 points (0.33%) to close at 42,374.36. The S&P 500 gained 12.44 points (0.21%) to finish at 5,809.86, while the Nasdaq rose by 138.83 points (0.76%) to close at 18,415.49. US futures are up this morning, with the Dow rising by 0.05%, the S&P by 0.09%, and the Nasdaq by 0.13%.

Asian markets are mixed today. The Nikkei index in Japan dropped by 0.60%, while South Korea's market rose by 1%. Australia also saw gains, and the Chinese market began trading higher.

Indian markets

On Thursday, Indian markets ended flat after a session of losses. The Bank Nifty rose over half a percent, while the Sensex and Nifty were slightly lower. Mid-cap and small-cap indices closed down. The financial, pharma, and healthcare sectors saw gains, while the FMCG sector experienced significant declines, with the sectoral index falling by 2.83%. 

Key players in the FMCG sector, like Hindustan Unilever, Colgate, and Marico, reported weak sales, contributing to the sector's drop. Hindustan Unilever's disappointing sales in urban areas particularly affected sentiment.

Additionally, Hindalco shares fell by 3.71% following a 28% drop in French aluminum company Constellium's stock, which raised concerns about potential losses in its foreign subsidiary, Novelis. 

In a notable deal, Escorts has agreed to purchase Kubota's railway business, causing Sona's stock to jump by 13.03%, while Escorts' shares fell by 5.6%.

Foreign investors continued to sell aggressively, with net sales of Rs 5,062.45 crore in the cash market on Thursday, bringing total foreign sales this month to a record Rs 97,205.42 crore. Domestic funds and institutions, however, made net purchases of Rs 3,620.47 crore yesterday, totaling Rs 92,931 crore for the month.

On the NSE, 1,032 shares rose while 1,740 shares fell. The BSE saw 1,490 gainers compared to 2,441 losers.

The Sensex closed at 80,065.16, down by 0.02%, and the Nifty ended 36.10 points (0.15%) lower at 24,399.40. The Bank Nifty gained 292.15 points (0.57%) to settle at 51,531.15. The mid-cap index dropped by 0.33% to 56,349.75, while the small-cap index fell by 0.20% to 18,249.45.

Market sentiments are low, with foreign selling ongoing and disappointing company results. Crisil's report predicting the lowest earnings growth in four years adds to the market's gloom, with estimates now suggesting a maximum increase of 7% instead of the previously anticipated 8.3% from the first quarter.

Technical indicators are also unfavourable for any upward movement, with Nifty expected to find support at 24,350 and 24,320. Resistance levels are seen at 24,460 and 24,495.

Gold prices rebounded yesterday after a profit-taking dip and a strong dollar on Wednesday. Gold rose by 0.75% to close at $2,736.30 per ounce. The recent decline in the dollar index has encouraged bullish sentiment, with many expecting gold to reach a mid-term target of $3,000 per ounce.

Gold update

Gold prices in Kerala decreased by Rs 480 to Rs 58,480 on Thursday, although prices may rise today. Silver closed at $33.61 per ounce.

The dollar index fell slightly, closing at 104.06. The Indian rupee remained steady at Rs 84.08, with potential gains expected today.

Crude oil prices fell marginally, with Brent crude down 0.75% to $74.38, but it was slightly up to $74.74 this morning. WTI crude traded at $70.52, and UAE’s Murban crude at $73.91.

Cryptocurrencies have made a comeback, with Bitcoin rising 3% to nearly $68,200 and Ether surpassing $2,530. This uptick follows reports that BRICS nations plan to reduce reliance on the dollar and include cryptocurrencies like Bitcoin in their payment systems.

In the industrial metals market, excluding aluminum, prices rose yesterday, with copper up 0.04% to $9,367.25 per tonne. Aluminum, however, fell by 1.40% to $2,635.40 per tonne. Other metals such as tin, zinc, nickel, and lead saw gains.

Market indicators

- Sensex: 80,065.16 (-0.02%)
- Nifty50: 24,399.40 (-0.15%)
- Bank Nifty: 51,531.15 (+0.57%)
- Midcap 100: 56,349.75 (-0.33%)
- Smallcap 100: 18,249.15 (-0.20%)
- Dow Jones: 42,374.40 (-0.33%)
- S&P 500: 5,809.86 (+0.21%)
- Nasdaq: 18,415.50 (+0.76%)
- Dollar (USD): ₹84.08
- Dollar Index: 104.06 (-0.35)
- Gold (oz): $2,736.30 (+$20.50)
- Gold (Pavan): ₹58,240 (-₹480)
- Crude (Brent): $74.38 (-$0.58)