Stock Market Overview
The Indian equity indices experienced a significant downturn on September 30, with the Nifty slipping below the psychological level of 25,850. By the close of the trading session, the Sensex settled at 84,299.78, representing a decrease of 1,272.07 points or 1.49%. The Nifty, on the other hand, wrapped up at 25,810.80, down by 368.20 points or 1.41%. A total of about 1,757 shares advanced, while 2,107 shares faced declines, indicating a predominance of selling pressure in the market.
Sector Performance
In terms of sectoral performance, all sectors closed in negative territory except for Metal and Media, which saw gains of 1% each. The Auto, Bank, IT, Telecom, Pharma, and Realty sectors suffered declines ranging from 1% to 2%. The BSE Midcap index also ended marginally lower, while the Smallcap index managed to close flat amidst a broadly bearish market sentiment.
Top Gainers and Losers
Among the Nifty constituents, stocks such as Hero MotoCorp, Trent, Axis Bank, Reliance Industries, and Bharat Electronics were among the top losers. Conversely, notable gains were recorded in JSW Steel, Hindalco Industries, NTPC, Tata Steel, and Britannia Industries, highlighting the selective performance within various sectors even in a weak market phase.
Market Outlook for October 1
Market experts have shared their insights on expected market movements:
Global Influences
Vinod Nair from Geojit Financial Services indicated that global markets have been disrupted due to rising geopolitical tensions in the Middle East, alongside the potential for an increase in yen interest rates. This scenario could lead to a reduction in cross-country investments in equities. In contrast, the Chinese market has seen a rebound fueled by extensive stimulus packages and appealing valuations. However, Indian markets are feeling the heat from these global pressures, compounded by relatively expensive valuations in the domestic landscape.
Sectoral Trends
The outlook for the metal sector appears promising in the near term, potentially offering a counterbalance to the prevailing market conditions. As the second quarter earnings results loom closer, market participants remain hopeful for improved earnings growth following a tepid first quarter performance.
Technical Analysis
Aditya Gaggar, Director at Progressive Shares, highlighted that a long-awaited correction was evident in today’s trading session. Following a gap-down opening, the index broke below psychological support at 26,000 and subsequent support levels, closing at 25,810.85. The formation of a strong bearish candle on the daily chart underscores the bearish sentiment prevailing in the market.
Future Support Levels
According to Gaggar, considering the recent formation of higher top and higher bottom patterns, the next support level for Nifty is anticipated at 25,500, which aligns with the 21-day moving average support. With the earlier support level of 26,000 now acting as resistance, bears are likely to maintain control unless bullish sentiment re-emerges.
Investor Sentiment
Rupak De of LKP Securities pointed out that following a brief respite, the Nifty experienced a steep decline, breaching its recent consolidation zone. This downturn appears to be supported by a notable negative divergence in the RSI (14), suggesting further weakness ahead. Current support for the Nifty lingers at 25,750, with additional weakness possible if the index drops below this threshold. Meanwhile, resistance is evident at the upper level around 26,000, where selling pressure is expected to intensify.
Conclusion
As the market grapples with a multitude of challenges, the overall sentiment remains cautious. Investors are encouraged to keep a close watch on international trends and upcoming corporate earnings, which could provide crucial insights into market direction going forward. Disclaimer: The views expressed in this article reflect the opinions of individual experts and do not necessarily represent the views of Moneycontrol.com. Investors are advised to seek independent guidance before making financial decisions.
