Tag Archives: sensex

Global Markets Dovetail After Iran Unleashes Overnight Missile Attacks on Israel

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Iran’s overnight ballistic missile strike on Israel has sent shockwaves through global markets on expected lines with a significant shift in investor behavior rushing for safer assets. Besides a decline in U.S. Treasury bond yields and a surge in gold prices, the safe-haven dollar has strengthened against the euro, trading close to its strongest in three weeks.

The missile strike, which occurred on October 2, 2024, has had a profound impact on oil prices. Brent crude has gained more than 1% to reach $74.40 per barrel, reflecting the market’s concern over potential supply disruptions in the Middle East due to the heightened tensions.

The geopolitical unrest has also affected stock markets in Asia, with Japan’s Nikkei slumping 1.5%, South Korea’s KOSPI dropping 1.3%, and Australia’s benchmark losing 0.3%. Due to a holiday on Mahatma Gandhi’s birth anniversary, India’s markets were closed on Wednesday.

The U.S. S&P 500 futures also weakened, indicating a risk-averse sentiment among investors. This shift in investor sentiment is a clear indication of the market’s reaction to the escalating geopolitical tensions and the potential impact on the global economy.

Impact on Central Banks’ Policies

The U.S. Federal Reserve’s potential interest rate cut in November is being influenced by a resilient U.S. job market, suggesting a smaller cut might be appropriate. Additionally, eurozone inflation trends are pointing towards an expected European Central Bank (ECB) easing, which could affect the global economic outlook and the Fed’s decision.

Fed Chair Jerome Powell’s comments have pushed back against the likelihood of another large rate cut, as the U.S. economy is seen as being on solid footing. Market expectations for a smaller cut are also shaped by data on job openings and the potential for continued economic growth. These factors are playing a crucial role in shaping investor sentiment and market expectations.

The Federal Reserve’s indication of a smaller interest rate cut in November, due to a resilient U.S. job market, has influenced market sentiment, with investors adjusting their expectations for a more measured approach to monetary easing. This has contributed to a slight unwind of long Treasury bets and a focus on economic data like job openings for further cues.

History Repeats

The geopolitical tensions and their impact on global markets are reminiscent of similar historical events. For instance, the 1990-1991 Gulf War led to a spike in oil prices and a sell-off in global stock markets due to fears of a wider conflict and potential disruptions to oil supplies. Similarly, the 2008 Russia-Georgia war led to a brief spike in oil prices and a dip in global stock markets. These historical events underscore the significant impact geopolitical conflicts can have on global markets and the economy.

The ECB’s expected quarter-point rate cut in response to inflation falling below its target has also shaped expectations, with investors anticipating a supportive monetary policy to boost the eurozone economy. These central bank policies are crucial in managing market expectations, affecting bond yields, the dollar’s strength, and overall investor confidence in the global economic outlook.

Sensex and Nifty Down But Surge In Midcaps and Smallcaps Push Market Sentiment

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The Indian equity market recently closed with marginal losses, primarily due to the impact of heavyweight shares such as Reliance Industries and HDFC Bank. The Sensex, a benchmark index of the Bombay Stock Exchange (BSE), closed 33 points lower at 84,266. Concurrently, the Nifty, the National Stock Exchange’s key index, was down by 13 points, closing at 25,796.

Despite the marginal losses in the primary indices, the market witnessed a surge in midcap and smallcap stocks. The Nifty Midcap 100 index rose by 204 points or 0.34%, closing at 60,358. Similarly, the Nifty Smallcap 100 index saw an increase of 151 points or 0.79%, ending the day at 19,331.

Market Sentiment

The overall market sentiment remained positive, with 2,308 shares on the BSE closing in the green, 1,655 in the red, and 91 remaining unchanged. This positive sentiment was reflected in the performance of various sectoral indices. The Auto, IT, PSU bank, pharma, metal, and media sectors were the primary contributors to the market’s performance. However, the Fin service, FMCG, realty, energy, private bank, and PSE sectors lagged behind. In the Sensex pack, several companies emerged as top gainers, including Tech Mahindra, M&M, Kotak Mahindra Bank, Infosys, SBI, HCL Tech, Wipro, Nestle, ICICI Bank, TCS, UltraTech Cement, Bajaj Finserv, and Sun Pharma. On the other hand, IndusInd Bank, Asian Paints, HUL, Tata Motors, Tata Steel, Titan, Reliance, NTPC, and L&T were among the top losers.

Technical Analysis

Rupak De, Senior Technical Analyst at LKP Securities, provided a technical perspective on the market’s performance. He noted that the Nifty formed a Doji pattern with a long upper shadow on the daily chart, indicating market indecision. He further explained that heavy call writing at 25,800 suggests it may act as strong resistance if sustained. Immediate support lies at 25750, and a decisive break below this could push the index to 25600/25500.

On the higher side, a move above 25800 may propel the Nifty towards 26050, where sellers could become active again. In the commodities market, gold prices showed a positive trend. In the MCX, gold prices rose by Rs 300, closing at Rs 75,890 per 10 grams. Similarly, in the Comex, gold prices were up by $15, closing near $2649 per ounce.

In a related development, L&T Finance Holdings (L&TFH) is showing signs of a potential bullish breakout after a period of consolidation. The momentum indicator, RSI, has provided a positive crossover, signaling a potential reversal in the stock’s direction. There is visible support at the 125 level, which is expected to act as a cushion for the bulls. If this support holds, it may pave the way for a move towards upside targets of 145 and 150.

While the equity market closed with marginal losses, the overall market sentiment remained positive. The surge in midcap and smallcap stocks, the positive performance of several sectoral indices, and the potential bullish breakout in L&T Finance Holdings are all positive signs for the market. However, investors should closely monitor key resistance and support levels as indicated by market experts tomorrow.

Sensex down by 300 points, Israel’s return attack fears grip markets

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BSE Sensex is down by more than 300 points on Tuesday after a plunge of 845 points on Monday, continuing the declining trend amid concerns about general elections, geopolitical factors, and uncertainty in the markets.

Sensex is trading at 73,040 points, down by 358 points. Sensex is on the verge of falling below the 73K mark if the weakness persists. IT and financials are trading weak with Infosys, Bajaj Finserv, Indusind Bank, Ultratech Cement, L&T down more than 1 per cent.

Analysts expect economic and geopolitical issues to continue to weigh on markets in the near term. The economic factor is the rising US bond yields which reduces the prospects of rate cuts by the Fed this year. High bond yields are negative for risky assets like equity and will accelerate FII selling in emerging markets like India, they said.

Essentially the market is more concerned about the geopolitical issue.

Israel military chief vowed that “there will be a response to Iran’s attack on Israel” and it has increased the probability of escalation of tensions in the Middle East, evolving into a bigger scale.

As investors seek to wait and watch the developments. high quality large-caps are on corrections to make them fair. Large-caps in banking, IT, autos, capital goods, oil & gas and cement are advised as ideal for long-term investment, V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services said.

Sensex, Nifty tank lower, midcaps see sharper decline

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The Nifty hit a new low, marking its lowest point in over a month, as it closed down by 1.08 percent or 238.3 points at 21,817.5 on Tuesday.

Trading volumes in the NSE cash market were modest at Rs. 0.83 lakh crore. Despite the negative advance-decline ratio at 0.36:1, the midcap index experienced a sharper decline compared to the Nifty.

In Asia, stock performance was mixed on Tuesday following the Bank of Japan’s decision to raise its benchmark interest rate for the first time in 17 years, signaling the end of its long-standing negative rate policy. This move by the Bank of Japan marks the termination of the world’s final negative interest rate policy in the country.

Analysts pointed out a breach of the Nifty’s support level at 21,745 could potentially intensify the downward trend, while resistance might be encountered around 21,905. The next significant support levels to monitor are around 21,500 within the next week. Any upward movement towards 22,000 could present a selling opportunity, they advise.

After a long period of consolidation, the Nifty experienced a significant downward breakout on Tuesday, closing lower by 238 points. From the opening bell, the market displayed weakness throughout the session on Tuesday. It may further decline shortly, analysts said.

 

Sensex plunges by 800 points, Indian Rupee touches 80.81 per US dollar

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Indian benchmark indice Sensex fell by 800 points as of 01:30 p.m. on Friday. which is at 58,314.78 points or 804.94 (1.36%) points down from the previus day, revealing the deep impact caused by the US Fed Reserve decision to hike interest rates steeply and its pledge to continue further to tame the inflation.

Nifty is also down to 17,407.05 or 222.75 points down (1.26%) today.

Stocks of Tata Steel, Sun Pharma, Hindustan Unilever Ltd (HUL), ITC, Dr. Reddy’s, Infosys, HCL Tech, Titan Company, and Maruti Suzuki were among top Sensex gainers. IndusInd Bank, Housing Development Finance Corporation (HDFC), M&M, Tech Mahindra, HDFC Bank, Axis Bank, Kotak Mahindra Bank were among top index draggers.

Tata Steel is in positive zone following the board’s approval on Friday to the scheme of amalgamation between seven of its group companies and itself.

Rupee to fall further: Experts

The Indian Rupee fell to its lowest level in 20 years reaching 80.81 per US dollar on Friday. The Indian Rupee fell to its lowest level against the greenback to 80.12 in August and again on Thursday, revealing the inherent weakness to go down further in value. Experts suggest that this time the Indian Rupee may weaken up to 82.00 level in the near future.

Sensex plunges by over 1,000 points, heavy sell-off in IT, banking shares

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Equities market was falling sharply on Friday during the afternoon trade due to heavy sell-off in IT, PSU Banks, Auto stocks following weak Asian markets on concerns of global recession, dealers said.

At 2.10 p.m., Sensex was down 1050.03 points or 1.75 per cent at 58,883.98, and Nifty was trading 326.56 points or 1.83 per cent lower at 17,550.85.

Mahindra & Mahindra, Tech Mahindra, Ultratech Cement, TCS, Infosys, Wipro were major losers during the afternoon trade on Sensex.

Mumbai:People walk past the Bombay Stock Exchange (BSE) building in Mumbai / IANS

Nifty IT and BSE IT index were down 2.91 per cent and 2.69 per cent respectively. Nifty PSU Bank index was down 2.79 per cent and BSE Auto was down 3.25 per cent.

“Indian equity markets are witnessing some selling pressure after a long period of resilience. Global cues continuously remain weak as there is a sharp surge in the dollar index and US bond yields post US inflation numbers. We may continue to outperform, but we can’t remain in isolation for a long time. Global markets are looking nervous ahead of the FOMC meeting because there is talk of a 100 basis rate hike while a 75 basis rate hike was already discounted,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.

Asian markets remained weaker on Friday due to growing fears of a global recession after the warnings by the World Bank and the International Monetary Fund.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.3 per cent. Australian shares were down 0.94 per cent on Friday, while Japan’s Nikkei stock index slipped 1.2 per cent.

Global Recession fears

The world may edge towards the global recession in 2023 as central banks across the world simultaneously hike interest rates to combat persistent inflation, the World Bank said.

The economies of the US, China, and the euro zone, were slowing and a slight hit to the global economy further would lead to recession.

“Technically, Nifty is facing resistance at the 18,100 level and it has slipped below its 20-DMA of 17,700 which may lead to some more selling pressure where 17,470-17,400 is an immediate demand zone then 17,150 is a sacrosanct support level. Bank Nifty is outperforming but yesterday it ended at a day’s low after hitting a fresh all-time high, which is a little disappointing. On the downside, 40,900-40,700 is an immediate demand zone; below this, 40,270 is the next important support level,” Meena added.

BREXIT Fall Out: PM Cameron to Quit in October

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Now that the UK has done what was expected in the last one decade, exiting from the European Union, Britain’s Prime Minister David Cameron has decided to quit from the office in October as the referendum went against his wish to continue in the Union.

In India, the government’s reaction is on expected lines that the economy has enough "firepower" to deal with the situation, and that the Reserve Bank of India (RBI) has been "working" on possible eventualities and the Economic Affairs Secretary Shaktikanta Das was upbeat on fundamentals. But let us face it — grim future ahead and perhaps another prolonged period of uncertainty and recession.

The BSE Sensex lost 1,050 points and investors have lost Rs.4 lakh crore in one day. The rupee touched the 68-mark, down by nealry one rupee in one day, indicating its weakness in a globally turbulent economy. "You know the pound sterling have been depreciating so all currencies have been depreciating," defended Das. With $360 billion in foreign exchange reserves with RBI, he said India’s position "is very sound and solid."

While the knee-jerk reaction is likely to cool in a coule of weeks, for Britain the changes will not be overwhelming as it had always played an outsider role within the European Union. Unlike other members, it had kept its currency, the pound sterling in tact and never joined the Schengen zone of passport-free travel in Europe. Its contribution to EU budget is also relatively less than others.

The pound sterling may see downward movement for sometime and so is India’s rupee but for the reality of entirely breaking away from the European Union may take about two years, if the current David cameroon’s government gives its consent and goes ahead with the referendum’s outcome to exit from EU. So, these two years will be sufficient for India to move closer to the UK both in terms of trade treaty and negotiate more opportunites.

While the immigration was a major cause of worry for Indians in Britain, they can breathe easy now with the exit plan putting a cap on 100,000 immigrants per annum taking concrete shape as no more EU immigrants can enter Britain so easily now. With the immigrants stopped from elsewhere, India may leverage the opportunity for a more favourable immigration policy with the UK.

Finally, the oil prices will fall following Brexit and it will squarely put in more reserves in RBI kitty. "So when oil prices decline, Indian economy benefits," said another Indian Finance Ministry official.

UK PM David Cameron to Resign in October.