Bears tightened their grip in the domestic stock market as benchmark indices extended their losses to a fourth straight session. The market opened lower and never had a chance to recover extending losses, especially towards the close. Sentiments on Dalal Street were hurt by weakness in the global market. All east Asian indices closed in the red while the European market also opened lower. Surging US bond yield is one of the key reasons that is hurting markets across the world.
The Nifty 50 index slipped 1.34 percent or 260.90 points to 19,281.75, while the BSE flagship 30-share Sensex dipped 1.26 percent or 825.74 points to 64,571.88.
Shareholders were left poorer by Rs 7.66 lakh crore as investor wealth reflected by market cap of BSE-listed companies tumbled to Rs 311.22 lakh crore.
"Despite the healthy performance of private banks and marginal reductions in oil prices, investor confidence remained pessimistic, and a widespread consolidation persisted in the domestic markets. The global markets echoed the same trend, as the unrest in West Asia has the potential to spiral further,” said Vinod Nair, Head of Research at Geojit Financial Services.
“Increased apprehensions surrounding prolonged elevated interest rates fuelled a continued upward movement in the US 10-year yield. Amid worries over moderation in growth on account of elevated interest rates and higher energy prices, heightened risk aversion was witnessed in the Indian mid- & small-cap space, banks, metals, and energy stocks. While a period of consolidation in the short term seems certain, the extent of this phase will be shaped by global factors."
Worsening geopolitical situation in Middle-East has made investors jumpy as escalation of conflict will likely lead to surge in crude oil prices, among other things.
Stocks and Sectors
Broader markets saw even worse selling. Nifty Smallcap 100 plunged 3.59 percent while Nifty Midcap slipped 2.66 percent. The broadest index, NSE 500 was down 1.86 percent.
All sectoral indices closed in the red. Nifty Media was the biggest loser, down about 5 percent. Nifty PSU Bank, Nifty Realty and Nifty Metal were other top losers falling 2-4 percent.
Among the Nifty 50 stocks, there were just two gainers. Mahindra & Mahindra and Bajaj Finance ended the day marginally higher. LTIMindtree, Adani Enterprises, Hindalco Industries and JSW Steel were those that suffered the most, falling 3-4 percent.
Outlook for Oct 25
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
Benchmark indices witnessed severe pounding in the last hour trades as simmering geo-political tension in the Middle-East region triggered a wave of selling pressure and prompted investors to offload equity holdings. Investors are already worried about further interest rate hike and inflation, and with the addition of the Israel-Hamas conflict, the uncertainty has increased further and leading to weak sentiment in global equities.
Technically, the Nifty has formed a long bearish candle on daily charts which is indicating further weakness from the current levels. For day traders, 19400 would be the key resistance level, below which the index could slip till 19200-19175. On the other hand, above 19400 we could see a quick technical bounce back till 19450-19500.
Deepak Jasani, Head of Retail Research, HDFC Securities
Nifty showed a downside breakout falling below the 19334 support. Midcap index fell to the lowest in 2 months. A long bear candle was formed on the daily charts which could prove to be a resistance in the next upmove. Risk off sentiments seem to be prevalent based on the adverse advance decline ratio. Nifty could now on a break of 19223 level, head towards 18840 while on upmoves 19480 could provide resistance.
Ajit Mishra, SVP - Technical Research, Religare Broking Ltd
We feel the prevailing negativity is not going to subside anytime soon citing weak global cues and recent sell-off in the broader indices may further deteriorate the sentiment. On the index front, we are now eyeing 19,200 as the next crucial support. Amid all, we reiterate our view to limit trades and prefer hedged positions.
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