Market heads for correction as bulls struggle to rally

Yesterday's trading suggests that the market's hopes for a recovery without entering a correction zone may be fading. Major indices have dropped by 7% from record highs reached four weeks ago, with mid and smallcap indices down over 8%. This month, foreign investors have sold more than $10 billion in shares. Hyundai Motor's shares also fell, adding to the overall negative market sentiment. The outlook for this year's GDP growth isn’t promising either, causing concern among companies like Nestlé, Tata Consumer, Parle, and Britannia regarding declining urban FMCG sales.

Foreign markets are not providing much encouragement either. Investment banks are warning that growth in the US market might be limited. In the derivatives market, the Nifty closed at 24,575 on Tuesday but dropped to 24,539 this morning, indicating a slight loss for the Indian market at the start of trading.

European markets closed slightly lower on Tuesday, although technology giant SAP raised its earnings forecast, boosting its stock to a record high. In the US, markets were mixed, with the Dow and S&P falling for the second consecutive day while the Nasdaq saw a small gain. Recent discussions about interest rate cuts have shifted towards potential hikes, leading to rising bond yields, with the ten-year US government bond yield reaching 4.2%. The stock market still anticipates a quarter-point rate cut in early November.

General Motors reported better-than-expected third-quarter results, with its stock rising 10%. Tesla and Coca-Cola are set to release their results today.

In the US, the Dow Jones closed down 6.71 points (0.02%) at 42,924.89, the S&P fell by 2.78 points (0.05%) to 5851.20, while the Nasdaq rose by 33.12 points (0.18%) to close at 18,573.13. US futures are down this morning, with the Dow down 0.32%, the S&P down 0.14%, and the Nasdaq down 0.19%.

Asian markets are up this morning, largely due to a significant IPO in Japan, which boosted Tokyo Metro shares by 40%. The Chinese market opened lower.

In India, the market started positively but ended with heavy losses. The mid-cap index fell by 2.61%, and the small-cap index dropped by 3.92%. Overall, one stock rose for every eight that fell. The Nifty is now down 7% and the Sensex down 6.7% from their record highs in September. All sectors are experiencing declines, with notable drops in public sector banks (4.18%), real estate (3.38%), metals, and automobiles.

Foreign investors sold ₹3,978.61 crore in the cash market yesterday, pushing total sales for the month to ₹86,458.34 crore—setting a record. Meanwhile, domestic investors purchased ₹5,869.06 crore worth of shares.

On Monday, the NSE saw 331 advancing shares against 2,516 declining shares, while the BSE had 494 gainers versus 3,499 losers.

Yesterday, the Sensex fell by 930.55 points (1.15%) to close at 80,220.72, and the Nifty dropped by 309 points (1.25%) to 24,472.10. The Bank Nifty decreased by 705.55 points (1.36%) to 51,257.15.

With ongoing foreign selling and concerns over interest rate adjustments, the market shows little sign of recovery. Experts warn that if the Nifty loses its current support level of 24,400, it could drop to 24,000-23,900. Today, Nifty may find support at 24,430 and 24,330, while facing resistance at 24,770 and 24,870.

In corporate news, shares of the Adani Group fell after Ambuja Cements announced a deal to buy a 46.8% stake in Orient Cement for ₹8,100 crore, with an open offer for an additional 26% stake at ₹395 per share. This move aims to boost Adani's position in the cement market.

Gold update

Gold prices are rising amid uncertainty about interest rates and the US presidential election. The conflict in West Asia adds to concerns, with gold prices hitting record highs. On Tuesday, gold closed at $2,749.40 per ounce and saw slight fluctuations in morning trading.

Silver is priced at $34.82 per ounce, and the dollar index increased to 104.08. The Indian rupee remains at ₹84.08 against the dollar, despite the Reserve Bank's efforts to stabilise it.

Crude oil prices are on the rise again, with Brent crude closing at $76.04 on Tuesday. It fell slightly to $75.67 this morning.

Cryptocurrencies are down, with Bitcoin falling below $67,400 and Ether dropping to $2,620.

Most industrial metals rose yesterday, with copper up 0.74% to $9,490.40 per tonne and aluminium up 1.49% to $2,634.24 per tonne. However, tin and nickel experienced declines.

Market indicators 

Sensex: 80,220.72 (-1.15%)

Nifty50: 24,472.10 (-1.25%)

Bank Nifty: 51,257.15 (-1.36%)

Mid Cap 100: 56,174.05 (-2.61%)

Small Cap 100: 18,061.00 (-3.92%)

Dow Jones: 42,924.89 (-0.02%)

S&P 500: 5851.20 (-0.05%)

Nasdaq: 18,573.13 (+0.18%)

Dollar ($): ₹84.08 (+₹0.01)

Dollar Index: 104.08 (+0.07)

Gold (oz): $2,749.40 (+$29.50)

Gold (Pavan): ₹58,400

Crude (Brent): $76.04 (+$1.75)