War, rising oil prices, FII's flight to China add to markets' worries

The Indian stock market is facing a range of challenges, including fears of war, rising crude oil prices, and the withdrawal of foreign investors. While there is some optimism among bulls that organised efforts will be made to stabilise the market, uncertainty remains. 

Yesterday, the market saw a sharp drop of over 2%, and it's unclear if further losses will occur. Both the Sensex and Nifty have fallen 4% from their record highs two weeks ago, leading to hopes that retail investors and mutual funds will step in as buyers. However, concerns are growing that foreign funds may withdraw further from Indian markets in favour of China, which is expected to announce more stimulus measures.

These uncertainties set the stage for today's weekend trading, with crude oil prices moving closer to $78 per barrel, adding further pressure on the Indian rupee.

In the derivatives market, the Gift Nifty closed at 25,433 on Thursday night. Early Friday trading saw it dip to 25,405 before climbing back to 25,440. These movements suggest that the Indian market is likely to open with small losses.

Global markets under pressure

European markets fell over 1% on Thursday, with the auto sector taking the biggest hit. Meanwhile, US markets continued to decline, with all eyes on the upcoming September jobs report. Economists expect 1,50,000 new jobs, down from 1,42,000 in August, with the unemployment rate anticipated to hold steady at 4.2%. Rising crude oil prices, which jumped over 5%, also weighed on the markets. However, some relief came with the resolution of the US port workers' strike.

The Dow Jones Industrial Average fell 184.93 points (0.44%) to close at 42,011.59, while the S&P 500 lost 9.60 points (0.17%) to finish at 5699.94. The Nasdaq also edged down by 6.65 points (0.04%) to close at 17,918.48.

US futures rose slightly this morning, with the Dow up 0.05%, the S&P 500 up 0.03%, and the Nasdaq rising 0.05%. US 10-year Treasury bonds saw yields fall to 3.844%, reflecting investor caution.

Asian markets remain in the red, with the Japanese market initially gaining but later dropping. Australia's market fell over 1%. The combination of war fears and rising crude oil prices continues to be the driving force behind these declines.

Indian markets slump sharply

On Thursday, Indian markets experienced a major sell-off. After opening in the red, major indices continued to drop throughout the day, with key indices falling by over 2%. The market's total capitalisation declined by ₹9.8 lakh crore, marking the biggest fall since 5 August.

Foreign investors are pulling money out of Indian markets to invest in China, which has surged nearly 30% in just two weeks. In the last three days alone, foreign investors have sold ₹26,879 crore worth of Indian equities, with ₹15,243.27 crore being sold just yesterday. On the domestic side, institutional investors purchased ₹12,913.96 crore of shares yesterday.

Mid cap and smallcap stocks also took significant hits, with every sector experiencing losses, led by realty stocks.

On Thursday, the NSE saw 638 stocks rise while 2,201 stocks declined. On the BSE, 1,107 stocks gained and 2,881 stocks fell.

The Sensex closed down 1,769.19 points (2.10%) at 82,497.10, while the Nifty lost 546.80 points (2.12%) to finish at 25,250.10. The Bank Nifty dropped 1,077.40 points (2.04%) to close at 51,845.20. The midcap index fell 2.21% to 59,024.70, and the small cap index dropped 1.96% to 18,952.60.

Both major indices are now down 4% from their highs on 27 September. If today's market continues to decline, it could signal a broader correction. The Nifty faces significant selling pressure if it falls below 25,000. Bulls are hopeful that domestic funds and financial institutions will step in to counter the market crash caused by war fears, derivative trade restrictions, and foreign sell-offs.

Today, the Nifty has support at 25,215 and 25,120, with resistance levels at 25,530 and 25,625.

Gold is up

After a profit-taking pullback yesterday, gold is attempting to rise again this morning. On Thursday, it closed at $2,656.50 per ounce, and this morning it stands at $2,658.50.

In Kerala, the price of gold increased by ₹80 on Thursday, setting a new record of ₹56,880 per sovereign. Silver prices also edged up slightly, reaching $32 per ounce.

The dollar index closed at 101.99 on Thursday but dipped slightly to 101.91 this morning.

The Indian rupee weakened again on Thursday, with the dollar rising by 15 paise to close at ₹83.97.

Crude oil prices surged by 5% yesterday amid concerns that Israel might attack Iran’s oil production facilities. Brent crude closed at $77.65 per barrel on Thursday, and this morning it is at $77.56. WTI crude is priced at $73.70, while UAE's Murban crude is at $77.61.

Cryptocurrencies, industrial metals

Cryptocurrencies fell once again, with Bitcoin dropping below $60,500 and Ethereum trading at $2,360.

Industrial metals showed mixed results. Copper fell 1.59% to $9,785.25 per tonne, aluminium dropped 0.96% to $2,633.54 per tonne, while zinc, nickel, and lead saw small gains. Tin prices fell by 1.30%.

Market indicators 

• Sensex 30: 82,497.10 (-2.10%)

• Nifty 50: 25,250.10 (-2.12%)

• Bank Nifty: 51,845.20 (-2.04%)

• Mid cap 100: 59,024.70 (-2.21%)

• Small cap 100: 18,952.60 (-1.96%)

• Dow Jones 30: 42,011.59 (-0.44%)

• S&P 500: 5699.94 (-0.17%)

• Nasdaq: 17,918.48 (-0.04%)

• Dollar: ₹83.97 (+₹0.15)

• Dollar Index: 101.94 (+0.26)

• Gold (per ounce): $2,656.50 (-$3.00)

• Gold (per sovereign): ₹56,880 (+₹80)

• Crude oil (Brent): $77.65 (+$4.09)