Domestic stock markets had a weak start on Friday. The market opened in the green with almost steady gains, but the indices failed to hold their ground and went into the red. There was a downward trend in the market throughout the day. Sensex fell 400 points, while Nifty went below 25,800. Bank Nifty also fell 400 points. Midcap and smallcap stocks also declined.
What is the reason for the huge fall in the market?
– Huge profit booking after a long time
– Markets halt near key levels after one-way rally
– A one-way rise of 1500 points was seen in Nifty which reached from 24,500 to 26,000.
– An improvement of up to 500 points from high levels is normal
– Signs of weakness will be visible only below 25,500, till then the trend will remain bullish.
– For day traders, the risk will increase if Nifty closes below 25,700 and Bank Nifty closes below 57,400.
– Indications of slight increase in volatility in the week ending monthly
– A sharp rise was also seen in Bank Nifty, which reached its highest level much before Nifty, hence there is a possibility of a slight decline.
– Markets are weak, but there is nothing to worry about right now
– Consider this as normal profit taking until a key level is crossed
stock market boom
Cipla
– Deal with Eli Lilly was good, but profit making was expected
Samman Capital
– Bullish trend in the stock market. A boom was seen after the ban was lifted.
If we look at the initial levels, the Sensex opened 111 points higher at 84,667. Nifty opened 44 points higher at 25,935. Bank Nifty opened 94 points higher at 58,172. However, there was a decline after the market opened. Buying was seen in defense sector stocks on Nifty. Shares of Hindalco, Shriram Finance, ONGC, Tata Steel, ICICI Bank and BEL witnessed gains. Meanwhile, shares of HUL, Cipla, Kotak Bank, Tata Consumer, Axis Bank and Max Health were the biggest losers.
Amid the rise in global markets, Nifty was trading around 26,060, up 40 points in the morning. The Nikkei gained more than 600 points, while the Dow futures gained slightly.
In the US, the Dow and Nasdaq closed higher on better corporate results and trade deal hopes. Crude oil and gold also rose sharply due to Russia-Ukraine tension and US sanctions. Domestically, the government’s approval of defense acquisitions worth ₹79,000 crore was a significant positive step for defense companies. Despite cash selling by foreign institutional investors (FIIs), heavy short-covering in indices and stock futures kept the market firm.
American markets closed strongly due to positive results. The Dow rose 144 points and the Nasdaq rose 201 points. After two days of decline, the Nasdaq completed a double century. The market remained strong due to growth in leading technology companies like Nvidia and Oracle. Strong results from Honeywell and American Airlines also supported the market.
Global sentiment positive on hopes of trade deal
A possible meeting between Trump and Xi Jinping at the Asia-Pacific summit in South Korea has raised hopes for a trade deal. US Consumer Price Index (CPI) data will also be released today, where the September CPI is expected to increase by 0.3% on a monthly basis. Better data could further strengthen the perception of Fed policy easing.
Sharp rise in crude oil and gold
Crude oil jumped nearly 5% to near $66 on US sanctions on Russian oil companies and expectations of increased demand from India. Due to increasing tension between Russia and Ukraine, a sharp rise in gold and silver was also seen. In the domestic market, gold rose by ₹2,200 to above ₹1,24,100, and silver rose by ₹3,000 to above ₹1,48,500.
FII-DII: Short covering dominates
FIIs sold ₹1,166 crore in the cash segment yesterday, but had huge short covering of ₹12,800 crore in futures. Domestic funds again took a buying stance and bought shares worth ₹3,900 crore. Barring minor selling during Muhurat trading, DIIs would have been in a continuous buying position for the last 40 days.