War, derivatives regulation cast a cloud of uncertainty over markets

West Asia conflict and rising crude oil prices are creating a cloud of concern over the market today. Adding to this, SEBI's new regulations aiming to reduce the trading volume in the derivatives market are pulling the market down. Foreign investors shifting their focus towards Chinese markets is also hindering the momentum of the Indian market.

GST collections in September have shown lower-than-average growth, while the decline in factory output is another negative indicator, which could weigh on the market.

In the derivatives market, Gift Nifty closed at 25,801 on Tuesday night and slipped to 25,735 today. This signals that the Indian market will open on a weak note.

Gloabl market scenario

European markets declined on Tuesday and Wednesday, while US markets fell on Tuesday but made marginal gains on Wednesday. The Dow Jones index dropped 173.18 points (0.41%) on Tuesday to close at 42,156.97. The S&P lost 53.73 points (0.93%) to end at 5708.75, while the Nasdaq dropped 278.81 points (1.53%) to close at 17,910.36. On Wednesday, the Dow Jones rose 39.55 points (0.09%) to close at 42,196.50, the S&P gained 0.79 points (0.01%) to end at 5709.54, and the Nasdaq climbed 14.76 points (0.08%) to finish at 17,925.10.

US futures were down this morning, with the Dow dipping 0.04%, the S&P 0.06%, and the Nasdaq 0.12%. The yield on 10-year US bonds fell to 3.79%.

Asian markets are on the rise today, with the Japanese market soaring by 2.5% as the yen weakened.

Indian markets

In India, the market closed with minor losses on Tuesday, although it ended higher than the opening level. Nifty closed below its 25,800 support level.

Foreign funds were net sellers again on Tuesday, offloading ₹5,579.35 crore in the cash market. Meanwhile, domestic funds and institutions net bought ₹4,609.55 crore.

Mid cap and small cap stocks saw gains on Tuesday, recovering from their nominal losses on Monday.

On the NSE, 1,640 stocks gained on Tuesday, while 1,139 declined. On the BSE, 2,240 advanced, while 1,743 fell.

Key indices fall

On Tuesday, the Sensex fell by 33.49 points (0.04%) to close at 84,266.29, while Nifty dipped by 13.95 points (0.05%) to end at 25,796.90. Bank Nifty closed 55.50 points (0.10%) lower at 52,922.60.

The midcap index climbed by 0.34% to 60,358.30, and the smallcap index rose by 0.79% to 19,331.30.

Sectors such as media, IT, auto, metals, and consumer durables saw gains, while oil and gas, realty, FMCG, and banking were down. 

The markets closed in negative territory for three consecutive days, dealing a blow to bullish sentiment. The escalating Western conflict and the new restrictions on derivatives trading are proving to be setbacks for the bulls. If Nifty loses support at 25,700, the next support level will be at 25,500.

Today, Nifty has support at 25,750 and 25,700, with resistance at 25,880 and 25,920.

Gold climbs

The West Asia conflict has driven up gold prices. On Tuesday, gold surged to $2,665 an ounce but closed at $2,659.50 yesterday. This morning, it stood at $2,656.50.

In Kerala, gold prices increased by ₹400 on Wednesday, reaching ₹56,800 per sovereign.

Silver prices also edged up, with the metal trading at $31.74 an ounce.

The dollar is rising again, with the dollar index closing at 101.68 on Wednesday, climbing to 101.75 this morning.

Oil prices stabilise, rupee weakens

The Indian rupee weakened again, with the dollar rising by three paise to close at ₹83.82 on Tuesday. The rupee is expected to remain under pressure today.

Crude oil prices surged by 6% but edged lower yesterday. Brent crude closed at $74.54, and this morning it was at $74.68. WTI was at $70.93, and the UAE's Murban crude traded at $74.62.

Crypto and metals

Cryptocurrencies slumped, with Bitcoin falling below $61,000 and Ether trading at $2,475.

Industrial metals continued to rise, with copper climbing 1.05% to $9,943.17 per tonne. Aluminium rose by 0.56% to $2,659.15, while zinc, tin, nickel, and lead all posted gains.

Market indicators (October 1)

• Sensex 30: 84,266.21 (-0.04%)
• Nifty 50: 25,796.90 (-0.05%)
• Bank Nifty: 52,922.60 (-0.10%)
• Mid Cap 100: 60,358.30 (+0.34%)
• Small Cap 100: 19,331.30 (+0.79%)
• Dow Jones 30: 42,156.97 (-0.41%)
• S&P 500: 5708.75 (-0.93%)
• Nasdaq: 17,910.36 (-1.53%)
• Dollar (₹): 83.82 (+₹0.03)
• Dollar index: 101.21 (+0.43)
• Gold (ounce): $2,665.00 (+$30.00)
• Gold (sovereign): ₹56,400 (-₹240)
• Crude (Brent): $73.56 (+$1.79)

Market indicators (October 2)

• Dow Jones 30: 42,196.50 (+0.09%)
• S&P 500: 5709.54 (+0.01%)
• Nasdaq: 17,925.10 (+0.08%)
• Dollar index: 101.68 (+0.47)
• Gold (ounce): $2,659.50 (-$5.50)
• Gold (sovereign): ₹56,800 (+₹400)
• Crude (Brent): $74.54 (+$0.98)