Hopes for recovery after fall; bulls believe markets may minimise loss

The markets, which suffered a significant collapse last Friday, are in the grip of concerns that they may decline further. However, statements from the US Treasury Secretary that the economy is not facing a recession may help improve sentiment. This is bolstered by a notable rise in US futures this morning.

While Indian markets also saw losses last week, they fell less than in other countries. Bulls believe the market may recover or minimise losses after a weak start today.

On Thursday, India and the US will release inflation data. Indian inflation is expected to fall to 4% in August, with significant reductions also anticipated in the US.

In derivatives, the GIFT Nifty closed at 24,773 on Friday night and rose to 24,848 this morning. The Indian market is expected to open slightly lower today based on this indicator.

US, European, Asian markets

European markets also plunged on Friday, with last week witnessing a 2.5% decline.

US markets showed weakness as well. Non-farm jobs in August increased by only 1,42,000, below expectations, but unemployment fell to 4.2%. With this, the market now expects the Federal Reserve to reduce interest rates by just 0.25% in September. Stocks declined. Retail and wholesale price indices will be released this week, and the Federal Open Market Committee meeting on 17th-18th September will take these figures into account. On Saturday, the US Treasury Secretary reiterated that the economy was on a recovery path, dismissing recession concerns.

Last week, the Dow Jones dropped by 2.9%, Nasdaq fell by 5.8%, and the S&P 500 slid by 4.3%, marking the biggest weekly fall for Nasdaq Composite since 2022.

On Friday, the Dow Jones fell 410.34 points (1.01%) to close at 40,345.41. The S&P 500 dropped 94.99 points (1.73%) to 5,408.42, and the Nasdaq plummeted 436.83 points (2.55%) to close at 16,690.83.

US futures are up this morning with the Dow rising by 0.16%, the S&P by 0.20%, and the Nasdaq by 0.30%.

US 10-year Treasury bond yields dropped to 3.742%.

Asian markets opened sharply lower today. The Nikkei in Japan plunged by 3%, while indices in Korea and Australia dropped by 1% each.

Concern over profitability of Indian banks 

Indian markets reacted to global concerns on Friday, with broker reports flagging concerns over the profitability of Indian banks, including public-sector banks. The PSU Bank Index fell by 3.57%, and the Private Bank Index dipped by 1.54%.

Goldman Sachs' report downgrading SBI's rating and profit expectations played a significant role in shaking the market. SBI's per-share earnings are expected to fall by 3% this fiscal year and 9% next year. Its target price was lowered to ₹818.60. SBI shares closed down 4.26% at ₹783.90.

On the NSE, 846 stocks rose, while 1,902 declined. On the BSE, 1,307 gained, and 2,649 fell.

On Friday, the Sensex dropped 1,017.23 points (1.24%) to close at 81,183.93, and the Nifty 50 ended 292.95 points lower (1.17%) at 24,852.15. The Bank Nifty Index declined by 1.74% (896.20 points) to close at 50,576.85.

The Midcap Index fell by 1.59% to 58,501.95, while the Smallcap Index dropped by 1.25% to 19,276.05.

Foreign investors sold stocks worth ₹620.95 crore on Thursday in the cash market, while domestic funds and institutions bought ₹2,121.53 crore worth of shares.

Market experts say the short-term trend has turned negative. The 50-day exponential moving average of 24,500 now offers short-term support for the Nifty, they suggest.

For Monday, the Nifty has support at 24,800 and 24,715, with resistance at 25,080 and 25,170.

Gold slips, crude climbs

Gold has fallen below $2,500 an ounce again, closing at $2,497.20 on Friday. This morning, it stood at $2,496. The December futures slipped to $2,526.

The market now expects only a 0.25% interest rate cut this month.

In Kerala, gold prices rose by ₹400 on Friday, bringing it to ₹53,760 per sovereign. By Saturday, prices fell back to ₹53,440.

Silver slipped to $27.92 an ounce.

The dollar index closed at 101.18 on Friday and rose to 101.22 this morning.

The decline in the dollar index has benefited the rupee. The dollar fell by 3 paise on Friday to close at ₹83.95.

Crude oil is on the rise again after a dip. Brent closed at $70.86 on Friday and climbed to $72.06 this morning. WTI crude is priced at $68.62, and UAE’s Murban crude is at $72.28.

Cryptocurrencies dipped again. Bitcoin fell to $54,000 but rose to $55,100 this morning. Ether is at $2,310.

Industrial metals showed mixed trends. Copper rose by 0.38% to $9,012.65 per tonne, while aluminium fell by 1.72% to $2,340.35. Nickel increased by 0.40%, zinc by 1.00%, and tin by 3.98%. Lead, however, dropped by 1.22%.

Market indicators (Friday, 6 September)

• Sensex 30: 81,183.93 (-1.24%)

• Nifty 50: 24,852.15 (-1.17%)

• Bank Nifty: 50,576.85 (-1.74%)

• Midcap 100: 58,501.95 (-1.59%)

• Smallcap 100: 19,276.05 (-1.25%)

• Dow Jones 30: 40,345.41 (-1.01%)

• S&P 500: 5,408.42 (-1.73%)

• Nasdaq: 16,690.83 (-2.55%)

• Dollar (₹): 83.95 (-₹0.03)

• Dollar index: 101.18 (+0.07)

• Gold (ounce): $2,497.20 (-$20.00)

• Gold (sovereign): ₹53,440 (-₹320)

• Crude (Brent): $70.86 (-$1.99)