Stock Market Today: Top 10 things to know before the market opens

Dalal Street

The benchmark Sensex and Nifty are likely to open marginally higher on October 30 as trends in the GIFT Nifty indicate a positive start for the broader index with a gain of 53 points.

The market rebounded sharply after days of relentless selling in the previous session, with benchmarks Sensex and Nifty closing a percent higher on October 27. Bearish sentiment is expected to prevail and uptrend, if any, is likely to be sold into, experts said.

At best the Nifty, which closed at 19,047, may consolidate below 19,500 with major support at 18,800, the low of the previous week, experts said. Selling pressure will intensify if the index slips below 18,800 and can slide to 18,600-18,500. On the higher side, 19,200-19,300 will be the immediate resistance, followed by 19,500.

"The index closed significantly below the critical breakdown level of 19,250. As long as it stays below 19,250, the market may continue to be inclined towards selling on any upward movements," Rupak De, senior technical analyst at LKP Securities said.

On the downside, weakness will resume if the index falls below 18,800. This is because Put writers are likely to defend the Nifty with substantial positions at 18,800, with immediate support placed at 19,000, he said.

The pivot point calculator indicates that the Nifty may take support at 18,960, followed by 18,924 and 18,867. On the higher side, 19,074 can be the immediate resistance followed by 19,109 and 19,166.

The GIFT Nifty indicates a marginally positive start for the broader index with a gain of 53 points. GIFT Nifty futures stood at 19,081 points after making a high of 19,090 points.

Trade setup for Monday: Top 15 things to know before the opening bell

US stock futures opened higher slightly ahead of a big week filled with a Federal Reserve rate decision, jobs report and Apple’s earnings report. S&P 500 futures added 0.3 percent, while Nasdaq-100 futures gained 0.4 percent. Dow Jones Industrial Average futures were up 0.1 percent.

The S&P 500 fell into correction territory last week, shedding 2.5 percent for the week to put it down by 10.6 percent from its 2023 high. The benchmark is off 4 percent for October, on pace for its third-straight negative month which would be its first such streak since 2020 as the pandemic struck.

The Federal Reserve decision looms on Wednesday, where the central bank is widely expected to hold its benchmark interest rate at the same level. With surging interest rates as the main culprit of this stock market correction, investors will be hoping the Fed signals it could be done raising rates. Traders expect the Fed to be done raising rates at least for 2023.

The 10-year Treasury yield jumped above 5 percent to start last week, but finished at 4.84 percent. Friday will bring the October jobs report with investors hoping for some slowing in the labor market that will allow the Fed to feel comfortable with staying on hold the rest of the year.

European stocks closed lower on Friday, with earnings and the state of the global economy keeping sentiment on edge. The benchmark Stoxx 600 ended down 0.8 percent, with most sectors and major bourses in negative territory. Healthcare stocks slipped 2.9 percent to lead losses, while chemicals stocks climbed 0.8 percent.

The pan-European index has had a muted week overall but is heading for its worst monthly performance since Sept. 2022, according to LSEG data. Company results have caused big movements in individuals stocks. NatWest

plunged as much as 17 percent near the open, before paring losses and ending the session down 11 percent. The bank reported third-quarter results that showed a lower net interest margin, while the UK’s Financial Conduct Authority said Friday morning it had found “potential regulatory breaches” in its report into a banking account scandal that ousted NatWest CEO Alison Rose.

Asia-Pacific markets started the week lower ahead of a week of key economic data from around the region. Monetary policy decisions from Japan and Malaysia, inflation data from South Korea, and gross domestic growth figures from Taiwan and Hong Kong are the regional highlights of the week.

Japan’s Nikkei 225 slid 0.96 percent as the Bank of Japan starts its two-day monetary policy meeting, while the Topix lost 0.91% in early trading. South Korea’s Kospi dropped marginally, but the small-cap Kosdaq rose 0.54 percent. In Australia, the S&P/ASX 200 slipped 0.83 percent, ahead of September retail sales readings on Monday. Futures for Hong Kong’s Hang Seng index stood at 17,175, pointing to a weaker open compared to the HSI’s close of 17,398.73.

On Friday in the US, all three major indexes ended the day mixed, with the S&P 500 entering correction territory as renewed selling occurred on Wall Street on fears of a recession. The 30-stock Dow Jones Industrial Average fell 1.12 percent, while the S&P 500 slipped 0.48 percent. The Nasdaq Composite held 0.38 percent higher to 12,643.01, thanks to Amazon beating analysts’ expectations for revenue and earnings in the third quarter.

Six initial public offerings (IPOs) together worth Rs 3,734 crore hit Dalal Street this week amid bloodletting in the market over the worsening situation in West Asia, worries surrounding US bond yields and FII selling. Two companies also make their market debut this week.

Equity benchmarks the Sensex and the Nifty tanked 2.5 percent in the week gone by and are down 6 percent from their record highs. Will the gloom rub off on the public offerings, including those of Cello World and Honasa Consumer, remains to be seen.

In the mainboard segment, consumer product company Cello World will be the first to launch its IPO today i.e., on October 30. The Rs 1,900-crore issue, which is an offer for sale of shares by promoters Rathod family, closes on November 1 and the price band has been fixed at Rs 617-648 a share.

All the top-10 most valued firms suffered a combined erosion of Rs 1,93,181.15 crore in market valuation last week, with Tata Consultancy Services (TCS) and HDFC Bank taking the biggest hit, in line with the bearish trend in equities.

In a holiday-shortened last week, the BSE benchmark tanked 1,614.82 points or 2.46 percent. The market valuation of TCS plunged Rs 52,580.57 crore to Rs 12,25,983.46 crore, the most among the top-10 firms.

HDFC Bank’s market capitalization (mcap) slumped Rs 40,562.71 crore to Rs 11,14,185.78 crore. The valuation of Reliance Industries Limited dropped Rs 22,935.65 crore to Rs 15,32,595.88 crore and that of Infosys tumbled Rs 19,320.04 crore to Rs 5,73,022.78 crore. The mcap of Bharti Airtel fell by Rs 17,161.01 crore to Rs 5,13,735.07 crore and that of Bajaj Finance diminished by Rs 15,759.95 crore to Rs 4,54,814.95 crore.

Foreign Portfolio Investors (FPIs) have pulled out over Rs 20,300 crore from Indian equities this month so far, primarily due to a sharp surge in the US treasury yield, and the uncertain environment resulting from the Israel-Hamas conflict.

However, the story takes an intriguing turn on observing FPI activity in Indian debt as they have infused Rs 6,080 crore into the debt market during the period under review, data with the depositories showed.

"Going ahead, the future of FPI flows hinges on several factors, including the US Federal Reserve’s November 2 meeting and global economic developments," Mayank Mehraa, small case manager and principal partner at Craving Alpha, said.

"In the short term, FPIs are expected to remain cautious amid global uncertainty and increasing US interest rates. Nonetheless, India’s strong economic growth prospects should maintain its appeal for foreign investors in both equities and debt," he added.

The ESAF Small Finance Bank IPO will be launched for subscription on November 3, with a target to raise Rs 463 crore. This would be the third public issue during the coming week, after Cello World and Mamaearth parent Honasa Consumer.

The anchor book will be opened for a day on November 2, while the public issue will be closing on November 7. The price band for the issue will be announced soon. The offer consists of a fresh issuance of shares worth Rs 390.7 crore by the company, and an offer-for-sale (OFS) of Rs 72.3 crore shares by three shareholders.

Promoter ESAF Financial Holdings will be selling Rs 49.26 crore worth of shares via OFS, while PNB MetLife India Insurance Company and Bajaj Allianz Life Insurance Company will offload Rs 23.04 crore worth of stocks in the OFS.

Private sector lender IDFC First Bank on October 28 reported a net profit of Rs 751 crore for the July-September quarter of financial year 2023-24, 35 percent higher from the year-ago period. It was, however, lower than Rs 785.7 crore estimated by Motilal Oswal.

The net interest income (NII), the difference between the interest the bank earned from its lending activities and the interest it paid to depositors, was at Rs 3,950 crore, up 31 percent from the year-ago period and above the estimates of Rs 3,923 crore. The lender's net interest margin (NIM) was at 6.32 percent compared to 5.83 percent in the year-ago quarter. The bank's deposits increased by 44 percent YoY basis to Rs 1.64 lakh crore in the July-September period. CASA deposits, too, grew 26 percent to Rs 79,468 crore.

Oil prices slipped $1 a barrel on Monday as investors adopted caution ahead of the Fed policy meeting and China’s manufacturing data later this week, offsetting support from geopolitical tensions in the Middle East. Brent crude futures dropped 98 cents, or 1.1 percent, to $89.50 a barrel by 0001 GMT while U.S. West Texas Intermediate crude was at $84.54 a barrel, down $1, or 1.2 percent.

Investors are eyeing the outcome of the Federal Reserve monetary policy meeting on Wednesday, US employment data and earnings from tech giant Apple Inc for signs of any economic slowdown that could impact fuel demand at the world’s top oil consumer, CMC Markets analyst Tina Teng said.

Both Brent and WTI ended 3 percent higher on Friday after Israel stepped up its ground incursions into Gaza, stoking worries that the conflict could widen in the region that accounts for a third of global oil production. “Despite an escalation in the Hamas-Israel war, the ground invasion was widely expected,” Teng said.

The Dollar index traded 0.06 percent higher in futures at 106.58, whereas the value of one dollar hovered near Rs 83.41.

Gold prices ticked higher and headed for a third consecutive weekly gain on Friday, supported by continued safe-haven demand fuelled by Middle East tensions, while investors awaited the US Federal Reserve policy meeting due next week.

Spot gold rose 0.5 percent to $1,993.69 per ounce and gained 0.7 percent for the week. US gold futures settled 0.1 percent higher at $1,998.50. Gold has been holding nearly all of its recent gains as the market remains extremely concerned about a conflagration in the Middle East, said Tai Wong, a New York-based independent metals trader.

Israeli forces carried out their biggest Gaza ground attack in their 20 day old war with Hamas overnight as Arab nations condemned the bombardment. Safe-haven bullion has gained around 8 percent, or more than $140, since the start of the war on Oct. 7. “If there is an escalation in the conflict, there are prospects of additional safe-haven buying... Gold investors will also be watching the outlook for U.S. Treasury yields,” said Daniel Ghali, commodity strategist at TD Securities.

Foreign institutional investors sold shares worth Rs 1,500.13 crore, while domestic institutional investors bought Rs 313.69 crore worth of stocks on October 27, provisional data from the National Stock Exchange showed.