Indian equity markets opened on a cautious note Tuesday as investors remained wary ahead of the closely contested US presidential election between Donald Trump and Kamala Harris, while continued foreign fund outflows and disappointing quarterly earnings added to market uncertainty.

At the market open on November 5, 2024, the Sensex slipped from its previous close of 78,782.24 to 78,664.64, down 117.60 points or 0.15 per cent by 9.40 AM. The Nifty opened lower at 23,916.50 from its previous close of 23,995.35 and reached 23,965.00, marking a decline of 30.35 points or 0.13 per cent.

Metal stocks showed strength in early trade, with JSW Steel leading the gainers pack, up 1.62 per cent, followed by Tata Steel gaining 1.53 per cent. Auto stocks also displayed resilience with Bajaj Auto rising 1.52 per cent, while Hindalco and Hero MotoCorp advanced 1.32 per cent and 1.14 per cent respectively.

On the flip side, Adani Ports emerged as the top loser, dropping 1.34 per cent, followed by ITC (-0.93 per cent), BEL (-0.69 per cent), Reliance Industries (-0.68 per cent), and HDFC Life (-0.67 per cent).

“India’s underperformance is striking: while S&P 500 is up 20.45 per cent YTD Nifty is up by only 10.36 per cent YTD. With two thirds of Nifty 50 companies missing their earnings estimates in Q2, Nifty 50 earnings for FY25 has been drastically revised down to less than 10 per cent from the consensus 15 per cent earlier,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Foreign institutional investors (FIIs) continued their selling spree, offloading equities worth ₹4,330 crore on November 4, while domestic institutional investors provided some support by purchasing shares worth ₹2,936 crore.

The market volatility index, India VIX, jumped 4.94 per cent to 16.6875, reflecting heightened uncertainty ahead of major events.

Manufacturing activity showed improvement as the HSBC India Manufacturing Purchasing Managers’ Index rose to 57.5 in October from September’s eight-month low of 56.5, indicating robust sector growth.

“The market structure is weak but oversold hence, the strong possibility of an intraday pullback rally from the current levels cannot be ruled out,” said Shrikant Chouhan, Head Equity Research at Kotak Securities, identifying 23,800 as a crucial support level for the Nifty.

Global markets remained mixed, with US stocks closing lower on Monday as factory orders dropped 0.5 per cent in September, marking the second consecutive monthly decline. Asian markets showed some resilience, with Japan’s market gaining 0.6 per cent, while South Korea and Taiwan declined over half a percent each.

Oil prices advanced after OPEC+ agreed to delay its December production increase, with Brent crude rising 2.6 per cent to nearly $75 a barrel.

Major companies scheduled to announce their quarterly results today include Titan, GAIL India, Mankind Pharma, Dr. Reddy’s Lab, Mazagon Dock, PB Fintech, and Oil India.

“Investors can opt for the safe strategy of remaining invested and accumulating stocks in segments which can weather the volatility. Apart from leading financials, auto stocks like Eicher Motors and M&M have exhibited earnings momentum and improving prospects,” Vijayakumar added.

Technical analysts suggest immediate support for Nifty at 23,800, with further support at 23,600, while resistance is seen at 24,050 followed by 24,150 levels.

Published on November 5, 2024