India’s headline equity indices recorded their worst session in over a month on Monday, pressured by uncertainty surrounding the closely contested U.S. presidential election while volatility surged to a three-month high.
The NSE Nifty 50 declined 1.27% to 23,995, and the BSE Sensex dropped 1.18% to 78,782, marking the biggest single-day losses for both indices since October 3.
Here's how analysts read the market pulse:
"The Nifty has corrected below 24,000 as the index slipped from its recent consolidation pattern. Sentiment will likely remain weak in the short term or until it decisively moves above 24,100. It might extend its correction towards 23,650 and lower on the lower end. On the other hand, a decisive move above 24,100 could trigger a rally towards 24,500," said Rupak De of LKP Securities.
Jatin Gedia of Sharekhan, said, "On the daily charts, we can observe that the five-day consolidation range has broken down suggesting the resumption of the downtrend. On the downside, the Nifty is likely to drift towards the 23,600 – 23,650 zone where the 40-week average is placed. On the upside, crucial resistance is placed at 24,368."
That said, here’s a look at what some key indicators are suggesting for Tuesday's action:
US market:
U.S. stocks are dipping ahead of a significant week filled with potential turning points, while other markets are experiencing sharper movements, including a rise in oil prices and a decline in Treasury yields.
In early trading on Monday, the S&P 500 fell by 0.3%, the Dow Jones Industrial Average dropped 165 points, and the Nasdaq composite decreased by 0.6%. Election Day is set for Tuesday, though the outcome may take time to determine as officials count the votes. Additionally, the Federal Reserve is scheduled to meet this week, with expectations for another interest rate cut.
Global markets:
The dollar weakened while stocks posted modest gains on Monday as investors remained cautious ahead of the upcoming U.S. presidential election, which could influence the global economy. Additionally, an interest rate cut from the U.S. Federal Reserve is anticipated later this week.
The dollar declined against several European and Asian currencies, slipping 0.76% against the euro to $1.090 and falling 0.7% against the Japanese yen to 151.90.
In the U.S. Treasury market, which had been pricing in a potential Trump victory over the past month that drove yields higher, traders adjusted their positions on Monday following a surprising poll showing Harris in the lead in Iowa. Consequently, U.S. Treasury yields fell across the board, with the benchmark 10-year note decreasing by 9 basis points to 4.28%, marking its largest daily drop since late August.
European stocks remained mostly flat, though energy stocks were among the top performers due to OPEC+’s decision to delay plans to boost output, which helped lift oil prices. British stocks outperformed their continental counterparts, gaining 0.4%, bolstered by the energy sector.
Tech View: Long bear candle
A long bear candle was formed on the daily chart with a minor lower shadow. Technically, this candle pattern indicates a decisive downside breakout of the range movement. Nifty continues its bearish trend of lower highs and lows on the daily chart, with recent sharp declines indicating a bearish flag breakdown and strong downside momentum.
The short-term trend of Nifty continues to be down and one may expect more weakness in the short term. The next crucial lower support to be watched is around 23,500, which is the 200-day EMA. Any bounce back from here could find strong resistance around the 24,200 levels, said Nagaraj Shetti of HDFC Securities.
In the open interest (OI) data, the highest OI on the call side was observed at 24,000 and 24,100 strike prices, while on the put side, the highest OI was at 24,000 strike price followed by 24,900.
Stocks showing bullish bias:
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Fine Organic Industries, Bajaj Holdings, Affle India, Happy Forgings, Mankind Pharma, and KIMS among others.
The MACD is known for signaling trend reversals in traded securities or indices. When the MACD crosses above the signal line, it gives a bullish signal, indicating that the price of the security may see an upward movement and vice versa.
Stocks signaling weakness ahead:
The MACD showed bearish signs on the counters of Coforge, Apollo Hospital, Muthoot Finance, Wipro, Axis Bank, and Dalmia Bharat among others. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Most active stocks in value terms:
RIL (Rs 2,576 crore), HDFC Bank (Rs 2,420 crore), M&M (Rs 2,174 crore), ICICI Bank (Rs 1,826 crore), PNB (Rs 1,341 crore), Infosys (Rs 1,278 crore), and Tata Motors (Rs 1,276 crore) among others were among the most active stocks on NSE in value terms. Higher activity on a counter in value terms can help identify the counters with highest trading turnovers in the day.
Most active stocks in volume terms:
Vodafone Idea (Shares traded: 60.9 crore), PNB (Shares traded: 13.2 crore), YES Bank (Shares traded: 6.8 crore), Suzlon Energy (Shares traded: 5.5 crore), IDFC First Bank (Shares traded: 5.2 crore), Zomato (Shares traded: 4.9 crore), and Indian Oil Corporation (Shares traded: 4.6 crore) among others were among the most traded stocks in the session on NSE.
Stocks showing buying interest:
Shares of Rainbow Children's Medicare, Gillette India, Crisil, City Union Bank, Federal Bank, Jubilant Pharmova, and UTI AMC among others witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.
Stocks seeing selling pressure:
Shares of Astral, and Birlasoft hit their 52-week lows, signaling bearish sentiment on the counter.
Sentiment meter bears:
Overall, market breadth favoured bears as 1,324 stocks ended in the green, while 2,756 names settled in the red.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
The NSE Nifty 50 declined 1.27% to 23,995, and the BSE Sensex dropped 1.18% to 78,782, marking the biggest single-day losses for both indices since October 3.
Here's how analysts read the market pulse:
"The Nifty has corrected below 24,000 as the index slipped from its recent consolidation pattern. Sentiment will likely remain weak in the short term or until it decisively moves above 24,100. It might extend its correction towards 23,650 and lower on the lower end. On the other hand, a decisive move above 24,100 could trigger a rally towards 24,500," said Rupak De of LKP Securities.
Jatin Gedia of Sharekhan, said, "On the daily charts, we can observe that the five-day consolidation range has broken down suggesting the resumption of the downtrend. On the downside, the Nifty is likely to drift towards the 23,600 – 23,650 zone where the 40-week average is placed. On the upside, crucial resistance is placed at 24,368."
That said, here’s a look at what some key indicators are suggesting for Tuesday's action:
US market:
U.S. stocks are dipping ahead of a significant week filled with potential turning points, while other markets are experiencing sharper movements, including a rise in oil prices and a decline in Treasury yields.
In early trading on Monday, the S&P 500 fell by 0.3%, the Dow Jones Industrial Average dropped 165 points, and the Nasdaq composite decreased by 0.6%. Election Day is set for Tuesday, though the outcome may take time to determine as officials count the votes. Additionally, the Federal Reserve is scheduled to meet this week, with expectations for another interest rate cut.
Global markets:
The dollar weakened while stocks posted modest gains on Monday as investors remained cautious ahead of the upcoming U.S. presidential election, which could influence the global economy. Additionally, an interest rate cut from the U.S. Federal Reserve is anticipated later this week.
The dollar declined against several European and Asian currencies, slipping 0.76% against the euro to $1.090 and falling 0.7% against the Japanese yen to 151.90.
In the U.S. Treasury market, which had been pricing in a potential Trump victory over the past month that drove yields higher, traders adjusted their positions on Monday following a surprising poll showing Harris in the lead in Iowa. Consequently, U.S. Treasury yields fell across the board, with the benchmark 10-year note decreasing by 9 basis points to 4.28%, marking its largest daily drop since late August.
European stocks remained mostly flat, though energy stocks were among the top performers due to OPEC+’s decision to delay plans to boost output, which helped lift oil prices. British stocks outperformed their continental counterparts, gaining 0.4%, bolstered by the energy sector.
Tech View: Long bear candle
A long bear candle was formed on the daily chart with a minor lower shadow. Technically, this candle pattern indicates a decisive downside breakout of the range movement. Nifty continues its bearish trend of lower highs and lows on the daily chart, with recent sharp declines indicating a bearish flag breakdown and strong downside momentum.
The short-term trend of Nifty continues to be down and one may expect more weakness in the short term. The next crucial lower support to be watched is around 23,500, which is the 200-day EMA. Any bounce back from here could find strong resistance around the 24,200 levels, said Nagaraj Shetti of HDFC Securities.
In the open interest (OI) data, the highest OI on the call side was observed at 24,000 and 24,100 strike prices, while on the put side, the highest OI was at 24,000 strike price followed by 24,900.
Stocks showing bullish bias:
Momentum indicator Moving Average Convergence Divergence (MACD) showed bullish trade on the counters of Fine Organic Industries, Bajaj Holdings, Affle India, Happy Forgings, Mankind Pharma, and KIMS among others.
The MACD is known for signaling trend reversals in traded securities or indices. When the MACD crosses above the signal line, it gives a bullish signal, indicating that the price of the security may see an upward movement and vice versa.
Stocks signaling weakness ahead:
The MACD showed bearish signs on the counters of Coforge, Apollo Hospital, Muthoot Finance, Wipro, Axis Bank, and Dalmia Bharat among others. Bearish crossover on the MACD on these counters indicated that they have just begun their downward journey.
Most active stocks in value terms:
RIL (Rs 2,576 crore), HDFC Bank (Rs 2,420 crore), M&M (Rs 2,174 crore), ICICI Bank (Rs 1,826 crore), PNB (Rs 1,341 crore), Infosys (Rs 1,278 crore), and Tata Motors (Rs 1,276 crore) among others were among the most active stocks on NSE in value terms. Higher activity on a counter in value terms can help identify the counters with highest trading turnovers in the day.
Most active stocks in volume terms:
Vodafone Idea (Shares traded: 60.9 crore), PNB (Shares traded: 13.2 crore), YES Bank (Shares traded: 6.8 crore), Suzlon Energy (Shares traded: 5.5 crore), IDFC First Bank (Shares traded: 5.2 crore), Zomato (Shares traded: 4.9 crore), and Indian Oil Corporation (Shares traded: 4.6 crore) among others were among the most traded stocks in the session on NSE.
Stocks showing buying interest:
Shares of Rainbow Children's Medicare, Gillette India, Crisil, City Union Bank, Federal Bank, Jubilant Pharmova, and UTI AMC among others witnessed strong buying interest from market participants as they scaled their fresh 52-week highs, signaling bullish sentiment.
Stocks seeing selling pressure:
Shares of Astral, and Birlasoft hit their 52-week lows, signaling bearish sentiment on the counter.
Sentiment meter bears:
Overall, market breadth favoured bears as 1,324 stocks ended in the green, while 2,756 names settled in the red.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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