Closing Bell: Sensex plunges 610 pts, Nifty near 19,550; IT, FMCG stocks bleed the most

The Indian rupee consolidated in a narrow range with a positive bias as the dollar index retreated and Asian currencies recovered. The index re-balancing-related inflows also supported the rupee in today’s trade. The Dollar is in demand, buoyed by factors like the repricing of the long-term Fed funds rate, high oil prices, and concerns over the direction of travel for both the European and Chinese economies. While the local rupee remained resilient to the greenback amid the central bank’s intervention.

Spot USDINR is expected to trade between 83 to 83.30 amid mixed economic data. Market participants will eye on next week’s RBI monetary policy decision. The Reserve Bank of India (RBI) is likely to keep its repo rate unchanged as India’s inflation is trending down after a surge in vegetable prices in July.

Taking Stock: Market bleeds as last-hour selling pushes Nifty below 19,550, all sectors in red

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"The Bank Nifty witnessed a resurgence of bearish sentiment as the bears took control, pushing the index lower. Strong resistance has formed at the 20-day moving average (20DMA) located at the 45,000 mark.The immediate support on the downside is situated at 44,200, and a breach below this level could trigger further selling pressure, potentially taking the index down to the 43,800 mark. In this scenario, it's advisable to maintain a "sell on rise" approach as long as the index remains below the 45,000 mark. "

"The Nifty has experienced a significant correction as it was unable to maintain levels above 19,750. On the daily timeframe, the most recent candle has engulfed the bodies of the preceding few days' candles, which suggests a negative sentiment. The prevailing sentiment continues to favor selling during rallies. Looking ahead, the Nifty may decline towards 19,250, with immediate support situated at 19,450. Resistance is positioned at the higher end at 19,600."

Markets resumed a negative tone after the recent breather and lost nearly a percent on the monthly expiry day. After the flat start, Nifty gradually inched lower as the session progressed and finally settled at 19523.55 levels. The decline was widespread on the sectoral front wherein IT and FMCG were among the top losers. The broader indices also felt the heat wherein midcap shed over a percent and smallcap closed marginally in the red.

The prevailing weakness in heavyweights across sectors combined with feeble global cues is weighing on the sentiment. After the failed attempt to reclaim 19750, we expect Nifty to inch further lower and test 19400 however the major support is at 19200. Participants should align their trades accordingly and focus more on risk management.

"The selling was broad-based, as investors are on alert given the rise of oil prices. If crude continues to stay above the 90 USD level, it will be a threat to inflation and boil the operational margins. Globally, US GDP data and the FED chief speech will be watched carefully, which will set the future trend. Currently, the combination of higher interest rates and US bond yields are influencing FIIs to stay in the selling mode."

Rupee ends at 83.19/$ against Wednesday’s close of 83.22/$

Broad-based losses across the market saw benchmark indices slip deeper into losses as the day progressed. At close, the Sensex was down 610.37 points or 0.92 percent at 65,508.32, and the Nifty was down 193.00 points or 0.98 percent at 19,523.50.

Losers outnumbered gainers as about 1,524 shares advanced, while 2,007declined, and 136 were unchanged.

The end of today's session also marked the end of the September F&O series.Nifty regained losses from the previous F&O series and ended 1.5 percent higher as against the previous series. The Nifty bank also gained nearly 1 percent while the midcap index continued to outperformed with almost 3 percent gains through the September F&O series.

The rupee held its ground so far this year, even as emerging market currencies slumped on rising worries over the Chinese economy and US interest rates souring the sentiment on riskier assets.

However, going ahead, the Indian currency will likely see a tug-of-war between headwinds from high crude oil prices and firm interest rates on one side, and tailwinds from JPMorgan bond index inclusion and possible RBI interventions.

Emerging market currencies have slumped up to 30 percent this year against the US Dollar. Russian ruble has tanked around 30 percent against the dollar so far in 2023 when the Chinese yuan lost around 6 percent. The Indian rupee, in contrast, slipped only 0.5 percent against US dollar. Read More

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The Sensex was down 634.51 points or 0.96 percent at 65,484.18, and the Nifty was down 202.70 points or 1.03 percent at 19,513.80. About 1,345 shares advanced, 1,762declined, and 91 were unchanged.