Thursday (30 October) was a day of profit booking for the domestic stock markets. After trading in the red throughout the day, the market closed with a heavy fall. Bank Nifty also fell after three days of gains. Sensex fell 593 points to close at 84,404. Nifty fell 176 points to close at 25,878. Bank Nifty fell 354 points to close at 58,031. Meanwhile, the currency market witnessed a huge decline. Rupee weakened by 50 paise and closed at 88.70/dollar.
Key benchmark indices traded in the red throughout the day amid mixed cues from global markets. Sensex fell 450 points during the day. Nifty also fell below 25,900. India VIX jumped 1.1%. All the indices on NSE were trading with losses. Profit booking was seen in private banks, NBFCs, FMCG, IT and metal companies.
What is the reason for market weakness?
1. Despite yesterday’s strong market, data shows selling by foreign institutional investors (FIIs)
2. Selling pressure from foreign institutional investors (FIIs) is still visible today
3. Rupee weakened further by 46 paise today
4. Profit booking in metal stocks remained strong so far
5. Weakness in IT shares also created pressure
Why is it difficult to stay above 26,000?
– 26,000 is a key psychological level
– 26,000 call options also have the highest open interest of Rs 1.85 crore
– Some profit booking is taking place after one-sided rally
– Despite yesterday’s foreign institutional investors (FII) data, it is difficult to hold above this level
Will Bank Nifty lead recovery?
– Bank Nifty is still outperforming Nifty
– Closed at the highest level in the last three days
– Still above intraday support level of 58000
– The weakness of Bank Nifty has been less than its lower level and more than the strength of its upper level.
– Canara Bank results were also good
– If there is recovery, Bank Nifty will be ahead
Is there still a fear of selling by foreign institutional investors (FIIs)? Looking at the screen it seems that the selling will continue even today.
– The problem is that foreign institutional investors (FIIs) are in no mood to short-circuit.
– It remains to be seen whether they continue to sell for 2-3 days or not.
stock rise
PB Fintech:
– A good rise of 8-10% was expected today after the results.
– A good jump of 6% despite such a weak market.
– Everyone got a chance to shop.
Canara Bank:
– The stock gained well due to strong results.
– Positive sentiment regarding the stock at ₹110.
Vedanta:
– Profit booking in metal stocks today.
– Selling started yesterday after the merger-splitting hearing was adjourned.
In the morning only 12 out of 50 Nifty stocks were in the green. LT, Shriram Finance, Adani Enterprises, Indigo, Jio Fin, TMPV were the biggest gainers. Dr Reddy’s, Sun Pharma, Bharti Airtel, HDFC Life, Max Health and Grasim were the biggest losers.
The Sensex opened at 84,750, down 247 points compared to yesterday’s closing price. Nifty opened 69 points lower at 25,984 and Bank Nifty opened 233 points lower at 58,152. In the currency market, the rupee fell 21 paise to open at 88.38/dollar.
There were mixed signals in the global markets in the morning. As expected, the US Federal Reserve cut interest rates by 0.25% (a quarter percent), bringing rates to a range of 3.75%-4.00%. However, Fed Chairman Jerome Powell expressed doubt over the possibility of further rate cuts at the next meeting, which dampened investors’ enthusiasm.
The Fed also announced the suspension of liquidity tightening (a bond selling program) from December to increase cash flow into the system. The announcement led to a sharp rise in US markets in the early session, but widespread volatility was seen towards the end. US markets hit intraday highs yesterday, but then fell back. The Dow Jones Industrial Average fell nearly 400 points from its new all-time high in intraday trading and closed 75 points lower. The Nasdaq closed at an all-time high, up 130 points. The S&P 500 also hit a new peak, but ultimately remained flat.
Global signals mixed
After the Federal Reserve’s policy announcement, Nifty fell 50 points to around 26,200, while Dow futures are trading around 50 points higher. Global markets are now eyeing the South Korea meeting to be held today, where former US President Donald Trump and Chinese President Xi Jinping are scheduled to meet. Trump has expressed hope for a “good trade deal” with China before this meeting.