Sensex, Nifty start action-packed week on a weak note, heavyweights under pressure

All sectoral indices struggled with losses, with automobile, banking, pharma, infrastructure, energy, and realty sectors falling 1-2 percent.

Indian benchmarks—the 30-stock Sensex and the Nifty 50—slipping nearly 2 percent each in on November 4, kicking off an action-packed week marked by the US Presidential election and the Federal Reserve's monetary policy meeting on a weak note. Weakness in the headline indices was intensified by selling across heavyweight names like Reliance Industries, Infosys, HDFC Bank, and ICICI Bank, all of which traded in the red.

At 09.45 am, the Sensex was down 1,328.84 points or 1.67 percent at 78,395.28, and the Nifty was down 442.80 points or 1.82 percent at 23,861.50. With the fall, the Nifty 50 tested its lowest level in four months. The market breadth also tilted heavily in favour of laggards as about 837 shares rose, 2,652 fell while 94 remained unchanged.

The major event on the radar this week is the US Presidential election on November 5, followed by the Fed's monetary policy outcome on November 7. While the US central bank is widely expected to deliver another rate cut—a quarter-percentage point this time around—the results of the US Presidential election have kept investors on edge. Touted as one of the most closely contested elections in US history, the outcome is expected to play a decisive role in shaping policies in the world’s largest economy and impacting global markets.

“A double dose of potentially market-moving events arrives in the coming week as Americans vote on their next president and the Federal Reserve offers more insight on the path of interest rates at its monetary policy meeting,” said Deepak Jasani, Head of Retail Research at HDFC Securities.

Meanwhile, investors are also focused on China's stimulus, details of which are likely to be announced on Friday after the five-day meeting of the standing committee of the National People’s Congress—China’s parliament—wraps up.

In the midst of that, oil prices ticked nearly 2 percent higher, gaining over $1 per barrel after OPEC+ stated it would delay a planned December output hike by one month due to soft demand and rising supply outside the group.

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Caught between several uncertain but key triggers, investors took a cautious stance in the domestic market, awaiting further clarity. The uneasiness in the market was also reflected in a more than 5 percent spike in the 'fear gauge' India VIX, which hovered above the 16-point mark.

Aside from the headline indices, the broader market, comprising mid and small-cap stocks, also witnessed selling pressure. Both the BSE Smallcap and the BSE Midcap indices traded around a percent lower.

Among stocks, Bajaj Auto and Hero MotoCorp were the worst hit on the Nifty 50, slumping over 5 percent each after reporting weak monthly sales for October. Another major laggard was Sun Pharma, which dropped over 4 percent after a US court ruling put a roadblock in the launch of its key drug, Leqselvi. Index heavyweights like RIL, ICICI Bank, and Infosys also slipped 1-2 percent, adding further pressure on the benchmarks.

On the flip side, M&M, Tech Mahindra, and Cipla were the top gainers on the Nifty, up around a percent each.

All sectoral indices struggled with losses, with automobile, FMCG, pharma, infrastructure, energy, and realty sectors falling 2-3 percent.

On the technical front, Palka Arora Chopra, director of Master Capital Services, sees a key resistance for the Nifty 50 at 24,500, with a breakout above this level potentially triggering a rally towards 24,800.

Conversely, Arora suggests that if the Nifty breaks below 24,100, it could experience further selling pressure, possibly testing the 23,800 level. "The market remains under pressure, suggesting a cautious stance. The strategy remains to sell on any rise until a decisive breakout above resistance confirms a bullish reversal," Arora recommended.

Also Read | Sensex, Nifty lead global market declines in October

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