Stock Market Analysis – October 3, 2023: On October 3, Indian equity markets experienced a significant downturn, closing weak amid widespread selling across all sectors. The BSE Sensex closed at 82,497.10, marking a decline of 1,769.19 points or 2.10%, while the Nifty 50 ended at 25,250.10, down by 546.80 points or 2.12%. The trading session witnessed 1,077 advancing shares against 2,740 declining shares, with 86 shares remaining unchanged.
Key Losers and Gainers
Among the top Nifty losers were notable names such as BPCL, L&T, Tata Motors, Shriram Finance, and Axis Bank. In contrast, JSW Steel and ONGC stood out as the top gainers for the day.
Sector Performance
All sectoral indices ended the day in negative territory, with the realty sector experiencing the sharpest decline at 4.5%. Other sectors, including Auto, Bank, Media, Capital Goods, Oil, and Gas, recorded declines ranging from 2% to 3%. Furthermore, the BSE Midcap and Smallcap indices also saw a downturn, each dropping by approximately 2%.
Market Insights
Market analyst Jatin Gedia from Sharekhan noted that Nifty opened with a significant gap down and, despite a brief recovery, persisted in its downward trend. The index closed below the 20-day moving average of 25,508, indicating weakness. A negative crossover observed in the Daily Momentum indicator is interpreted as a sell signal. Both price action and momentum indicators suggest that this weakness is likely to continue, with the immediate target of 25,500 achieved. Analysts now forecast a potential drop to 24,800 as the next marker. Resistance levels for Nifty are identified at 25,600 to 25,550 in the short term.
Bank Nifty Analysis
The Bank Nifty index also closed below its key short-term averages after showing upward momentum in late September. Currently in correction mode, Bank Nifty is leading the decline, with expectations of a further drop towards the psychological level of 49,700, which corresponds to its August low. Resistance levels are identified at 52,600 to 52,700.
Market Sentiment
Aditya Gaggar, Director at Progressive Shares, stated that ongoing adjustments in the Futures and Options (F&O) segment, combined with macroeconomic uncertainties, have negatively impacted overall market sentiment. Following a gap-down opening, bearish trends dominated, leading to Nifty breaking through crucial support levels. The index recorded a substantial decline of 546.80 points, culminating in a closing value of 25,250.10.
Technical Insights
The Nifty index has broken down from its series of higher tops and higher bottoms, which is typically a bearish sign indicative of a trend reversal. However, on the lower time frame charts, the market appears quite oversold, suggesting the potential for a pullback rally. The next significant support level for Nifty is located at the psychological milestone of 25,000 or the 50-day moving average. On the upside, resistance is expected within the range of 25,550 to 25,600.
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