Dear
Trader…
Indian equity benchmark indices Sensex and Nifty Future
reversed early gains and closed in the red on Tuesday, weighed down by banking,
financial, and auto stocks amid disappointing earnings and foreign outflows.
Investors also awaited inflation data, scheduled for release later in the day.
The 30-share BSE Sensex dropped 821 points, or 1.03%, to
settle at 78,675. The broader NSE Nifty future fell 295 points, or 1.22%, to
close at 23,931.
The market capitalisation of all listed companies on BSE
declined by Rs 5.76 lakh crore to Rs 436.78 lakh crore.
NTPC, HDFC Bank, Asian Paints, SBI, Tata Motors, and Maruti
Suzuki were the top Sensex laggards, falling by 2-3%. HDFC Bank alone
contributed 316 points to the overall decline in the Sensex.
Here are top factors that aided today’s selloff :–
1. Asian stocks drop sharp – Asian stocks fell on Tuesday, led by declines in Chinese
markets and semiconductor shares, as investors expressed concerns over U.S.
President-elect Donald Trump’s policies. Meanwhile, bitcoin surged to a record
high, fueled by expectations that assets benefiting from the new administration
will perform well.Markets are optimistic that Trump’s second term will
bring tax cuts and reduced regulations, boosting equities. This optimism helped
propel bitcoin to an all-time high of $89,637.
2. FIIs extend selling spree – On November 11, foreign institutional investors (FIIs)
maintained their selling trend, offloading equities worth Rs 2,306 crore.
Meanwhile, so far in November, FIIs have sold equities worth Rs 23,547 crore,
following the Rs 94,017 crore worth of equities sold in October. FII-triggered
selling pressure continued to impact the domestic market. The recent
strengthening of the dollar, driven by aggressive Trumponomics is adding fears.
3. Oil rises amid China stimulus
concerns – Oil
prices were little changed on Tuesday, awaiting further price direction from
OPEC’s monthly report, while investor disappointment over China’s latest
stimulus plan and oversupply concerns limited gains.
Brent crude futures rose 38 cents, or 0.5%, to
$72.21 a barrel, by 0944 GMT. U.S. West Texas Intermediate crude futures were
up 36 cents, or 0.5% at $68.40 a barrel.
4. Rupee at record low –The Indian rupee touched its all-time low on Tuesday,
pressured by the dollar’s rise to an over four-month peak and by likely
outflows from local equities.
The rupee hit a low of 84.4125 before ending at
84.3925, unchanged from its closing level in the previous session. The currency
has fallen to record lows for five straight sessions. Donald Trump’s victory in
the US election has boosted the dollar index, which has risen 1.8% so far this
month.
5. October Inflation Data in focus – Analysts expect October’s inflation data, due
after the market’s close, to rise to around 5.8%, a 14-month high. This data is
crucial as it may provide insights into the economy’s condition and determine
whether the Indian central bank will proceed with a 25-basis-point rate cut in
December.
Nifty futures opened at 24266 points against the previous
close of 24226 and opened at a low 23921 points. Nifty Future closed with an
average movement of 394 points and decline of around 295 points and closed 23931
points…!!
Meanwhile, Two
strong factors have been at play in this consolidating market. One, the
relentless selling by FIIs has been favouring the bears and pulling the market
down. Two, the sustained buying by DIIs has been supporting the market
preventing a crash in the market. How the market will trend in the coming days
will depend on the relative strength of these two factors.
The anticipated rise in domestic inflation, due
to increasing food prices, along with depreciating INR, may influence the RBI’s
monetary policy.
Technically, the
important key resistances are placed in Nifty future are at 23931 levels, which
could offer for the market on the higher side. stainability above this zone
would signal opens the door for a directional up move with immediate
resistances seen at 24008 – 24108 levels. Immediate support is placed at 23808 –
23676 levels.
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