On Friday, Nifty closed at 24,964.25, lower by 34.20 or 0.14%.
The psychological support of 25,000 was breached on a closing basis for two consecutive days, which indicates that the weakness is likely to continue, Tejas Shah, Technical Research at JM Financial & BlinkX said. At the current juncture, the bears are in full control of the markets and are using every pullback rally to create short positions, he said.
Factors that are likely to impact movement when markets reopen this week:
1) Q2FY25 earnings
Nearly 120 companies will be announcing their July-September quarter earnings over the next seven days. Among them will be a host of Nifty companies like HCL Technologies, Reliance Industries (RIL), HDFC Life Insurance Company, Bajaj Auto, Axis Bank, Infosys, Wipro, Nestle India, LTIMindtree, HDFC Bank, Kotak Mahindra Bank and Tech Mahindra.
Market will also react to the earnings of DMart operator Avenue Supermarts and Network18 who had announced their results on Saturday.
2) Hyundai IPO
One of the most anticipated initial public offerings (IPO) of Hyundai Motor India will open for subscription on Tuesday, October 15. The Rs 27,870 crore IPO is an offer for sale (OFS) where Korean parent Hyundai Motor Company (HMC) will sell 14.2 crore shares. The company has set the IPO price band at Rs 1,865-Rs 1,960 per equity share.
Also Read: Hyundai IPO: Be mindful of these 7 risks ahead of issue opening on Tuesday
Apart from this, two other SME IPOs from Lakshya Powertech and Freshara Agro will open for subscription next week. Further, the Street will also see three listings including Garuda Construction, which opened in the week gone by.
3) US Markets
Domestic markets will take cues from their overseas peers, especially those on Wall Street.
On Friday, US markets ended with gains. While the Dow 30 settled at 42,863.90, up by 409.74 or 0.97%, the S&P 500 closed at 5,815.03, lower by 34.98 points or 0.61%. The Nasdaq Composite finished at 18,342.90, falling by 60.89 points or 0.33%.
4) FII / DII Action
On Friday, the foreign institutional investors (FIIs) were net sellers at Rs 4,162.66 crore while the domestic institutional investors (DIIs) were net buyers at Rs 3,730.87 crore.
Foreign Portfolio Investors (FPIs) have been net sellers of Indian equities at Rs 58,711 crore in October so far, wiping out a substantial portion of the overall inflows in 2024 in just 8 sessions. The total investments by them now stand at Rs 41,899 crore versus Rs 1,00,245 crore at the end of September.
5) Technical Factors
The week commenced with a minor setback but swiftly found support and transitioned into a consolidation phase, Osho Krishan, Senior Analyst – Technical & Derivatives at Angel One said, suggesting that such a breather is constructive development and likely to pave the way for the primary trend in the comparable period.
From a technical standpoint, the 50 DEMA has been a significant barrier in the short term, positioned around 25,050-25,080, and a decisive breakthrough above this level would be instrumental in accelerating the bullish momentum toward higher levels, Krishan said
The intermediate resistance zone is centered around 25,250-25,300, aligning with the 20 DEMA and a strong breakthrough at this level could potentially trigger the next phase of the rally from a positional perspective, he opined.
At the lower end, the recent low of 24,800-24,700 is expected to offer robust support and mitigate any potential setbacks but a decline below this level could be disruptive, potentially leading to further correction, warranting strong risk management, this analyst warned.
6) Rupee Vs Dollar
The rupee breached the 84/dollar mark for the first time Friday, settling at 84.06, down 12 paise from Thursday’s close of 83.94. Opening at 83.98, the currency touched an intraday record low of 84.07.
The breach of the 84 level is significant as RBI had defended this threshold for over two months. Friday’s intervention marked the central bank’s continuing efforts to prevent sharp volatility in the currency market. Some dealers feel RBI may have allowed the rupee to cross 84 for tactical reasons, anticipating more volatility in coming days should the Iran-Israel conflict escalate.
The continued strength of the dollar, driven by dimmed expectations of a 50-basis-point rate cut from the US Federal Reserve in November, has also contributed to the rupee’s weakness.
Rupee’s closing at 84.06 is its lowest closing while the 84.08 achieved today is its all-time low, Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP said. “The weekly closing above 84.00 could take dollar rupee higher to 84.25 levels in the short term,” Bhansali said.
7) Crude Oil
Oil prices remain critical for markets with their impact on inflation and on the rate trajectory of global central banks including India’s.
Crude oil prices remain volatile amid uncertainties around Middle-East conflict. On Friday, benchmark oil prices ended with decline.
The US WTI oil contracts ended at $75.49, up by $0.36 or 0.47% while Brent oil futures were hovering near $79.04, higher by $0.61 or 0.77%.
Higher crude oil prices do not augur well for the equity markets, fuelling inflation fears.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
