Market falls for 3rd consecutive session; investors lose about ₹2 lakh crore

The equity market is dealing with multiple headwinds at this juncture. The US government bond yields have hit the 5 per cent mark for the first time since 2007 as the US Fed remains hawkish. On the other hand, the Israel-Hamas war has raised the concern that it can escalate into a bigger regional crisis.

“The traditional driver of world borrowing costs – the 10-year US Treasury yield – had retreated to 4.93 per cent but with oil back above $93 a barrel and Israel looking like it was gearing up for a full-scale invasion of Gaza, the mood was fraught,” reported Reuters.

Also Read: US 10-year bond yields near 16-year high. How can it impact Indian stock market?

Dealing a blow to market expectations that interest rates have peaked, Federal Reserve Chairman Jerome Powell on Thursday said that more interest rate hikes may be required to bring inflation down to 2 per cent.

Meanwhile, crude oil prices rose over a per cent with Brent Crude trading near the $94 per barrel mark. According to a Reuters report, oil prices were headed for the second weekly gain due to fears of an escalating regional conflict in the Middle East which would disrupt supplies.

Nifty 50 today opened at 19,542.15 against the previous close of 19,624.70 and touched the intraday high and low of 19,593.80 and 19,518.70 respectively. Nifty 50 today closed at 19,542.65, down 82 points, or 0.42 per cent.

Sensex opened at 65,437.07 against the previous close of 65,629.24 and touched its intraday high and low of 65,555.14 and 65,308.61 respectively. The 30-share index closed the day at 65,397.62, down 232 points, or 0.35 per cent, with 20 stocks in the red.

Mid and smallcaps suffered bigger losses. The BSE Midcap index fell 1.02 per cent while the Smallcap index dropped 0.76 per cent.

The overall market capitalisation of the BSE-listed firms dropped to nearly ₹319 lakh crore from nearly ₹321 lakh crore in the previous session, making investors poorer by about ₹2 lakh crore in a day.

(Exciting news! Mint is now on WhatsApp Channels. Subscribe today by clicking the link and stay updated with the latest financial insights! Click here!) 

Top Nifty 50 gainers today

Shares of Kotak Mahindra Bank (up 1.81 per cent), IndusInd Bank (up 1.29 per cent) and SBI Life Insurance Company (up 1.18 per cent) ended as the top gainers in the Nifty 50 index.

Top Nifty 50 losers today

Shares of ITC (down 2.75 per cent), Tata Steel (down 2.30 per cent) and BPCL (down 2.06 per cent) ended as the top losers in the Nifty pack.

As many as 36 stocks ended in the red in the Nifty 50 pack while the remaining 14 ended higher.

Sectoral indices today

Barring Nifty Private Bank (up 0.06 per cent), all sectoral indices closed with losses today, with Nifty Consumer Durables and PSU Bank indices falling 1.65 per cent and 1.57 per cent, respectively.

Nifty Oil & Gas (down 1.44 per cent), Metal (down 1.33 per cent), FMCG (down 1.32 per cent), Pharma (down 1.09 per cent) and Realty (down 1.08 per cent) ended with substantial losses.

Nifty Bank fell 0.07 per cent.

Experts’ views on markets

Vinod Nair, Head of Research at Geojit Financial Services said the added uncertainty stemming from West Asia tensions and the imperative for continued monetary tightening emphasized by the US Fed Chair created a layer of volatility in the market.

Nair added that heightened oil prices and elevated US bond yields will impact the domestic monetary environment and operational metrics of the companies. Furthermore, the varied results of blue-chip companies, influenced by subdued global and domestic demand, are steering the market towards a consolidation trajectory in the near term.

Ajit Mishra, SVP – Technical Research at Religare Broking said weak global cues combined with pressure in the key sectors are currently weighing on the sentiment and he does not expect relief anytime soon.

“Traders should align their positions accordingly and continue with a hedged approach,” said Mishra.

Technical views on Nifty 50

Amol Athawale, Vice President – Technical Research at Kotak Securities pointed out that on daily and intraday charts, the Nifty formed a double top formation and reversed. Post reversal, the index is comfortably trading below the 20 and 50-day SMA (simple moving average ) which is largely negative.

In addition, on weekly charts, it has formed a bearish candle which indicates the continuation of weakness in the near future

“As long as the index is trading below the 20-day SMA the weak sentiment is likely to continue. For traders, 19,700 would be the immediate hurdle and below the same, the index could slip to 19,450-19,350,” said Athawale.

“On the other side, above 19,700 or 20-day SMA, it could retest the level of 19,800-19,850,” Athawale said.

Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas said on the daily charts, the Nifty is trading at the crucial support zone of 19,530 – 19,500 where 61.82 per cent Fibonacci retracement level of rise from 19,333 – 19,850 is placed.

The hourly momentum indicator is showing a positive divergence, however, price confirmation is missing. The daily momentum indicator has triggered a negative crossover which is a sell signal.

“Considering prices are trading at crucial support levels only a breach below the 19,500 – 19,450 zone may lead to a sharp decline. In terms of levels, 19,550 – 19,500 is the crucial support zone while 19,640 – 19,660 should act as an immediate hurdle zone. Today the fall was more evident in the broad market with the Midcap index down about 1 per cent. The fall appears a bit overstretched in the short term and we expect a pullback during the next week,” said Gedia.

Read all market-related news here

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

“Exciting news! Mint is now on WhatsApp Channels ???? Subscribe today by clicking the link and stay updated with the latest financial insights!” Click here!

Updated: 20 Oct 2023, 04:12 PM IST