Market Corrected As Expected, More Dips May Be Seen

As we have been advising to avoid longs in index since Thursday, have seen sharp liquidation today. The NIFT index have fallen almost 460 points since Friday’s top and Bank nifty slide almost 1400 points from Friday’s high. The NIFTY index today lost over 1.41 per cent  and Bank nifty dropped around 1.59 per cent . Excluding media and metals, almost all sectoral indices closed on negative note and NIFTY VIX (volatilityindex)rose around 6.89 per cent . The breadth of the large cap NIFTY50 and broader market index NIFTY 500 showed selling momentum. The advance decline index in NIFTY was 9:41 while 202:298 was in NIFTY 500.

In Asian market today, the Japanese NIKKEI index dropped around 4.8 per cent despite China’s SSE composite index advanced over 8 per cent post government stimulus. The Hang Seng index rose 2.43 per cent.

“Many market analysts were with the opinion the NIFTY may continue the momentum, however we are cautious looking at the divergence within the market” – as per advice for Friday, all the broader market indices ended in red today.

Swiggy, Hyundai Motor India, Acme Solar Holdings, Vishal Mega Mart, and Mamata Machinery got approval from the capital markets regulator SEBI to go ahead with their IPO plans.

During Sep till last Friday, foreign portfolio investors (FPIs) or FII have bought shares worth nearly USD 7 billion in India making it the highest quantum of net buying since December 2023. However, they are seen selling Indian equities past three days where DII has ben net buyers.

Corporate and economic developments

• Jindal Stainless Ltd has partnered with CJ Darcl Logistics Ltd (CJ Darcl) to develop lightweight and sustainable stainless-steel containers.

• India has extended the import authorisation system for laptops, PCs, tablets, and servers from the original deadline of September 30 to December 31

• Alphageoindia have got a contract worth Rs 131.63 cr from OIL The contract is 2D seismic data acquisition in Ganga-Punjab basin

• Insurance companies are liable to pay Rs 20,000 crore for GST violation: DGGI

• Blue Dart to implement general price increase w.e.f. January 1, 2025. The average price increase will be in the range of 9-12 per cent  depending on product variabilities and the shipping profile.

• RS Systems launches Chaos Engineering integrated DR Model to enhance business continuity and resilience.

• Bharti Airtel prepays Rs 8,465 cr to DoT, clears spectrum liabilities from 2016

• SBI Card partners with Singapore Airlines to launch co-branded credit card.

• Bajaj Auto takes the number 2 spot in electric 2-wheeler retail sales in September 2024. Company’s Chetak e-Scooter has a market share of 21.4 per cent  vs Ola Electric’s 27.6 per cent  market share

• Core Industries Data: India’s Aug key industries' output falls 1.8 per cent  vs growth of 6.1 per cent  in July, as per Indian government data release.

Market Outlook - Index

NIFTY: The index may see further weakness after a weak close and with immediate support placed at 25730, 25600 area (20 DEMA zone) and crucial trendline support at 25430-400 range. The market seems to have formed a bump-and-run reversal formation and suggests no longs as long reversal from the correction is seen. It may not be a buy on dips market now. The immediate resistance is at 26000 mark – a psychological level. Any gap-up can be sold off today with immediate intraday target of 25700-730. However, any gap down may see some short covering making the intraday market sideways.

BANK NIFTY: The Bank Nifty has failed to take support at 53300 and now has a room at 52700 level where it may find some support at 20 days EMA. The 53300 level may act as a resistance for banks now and as long as it sustains below the resistance, fresh uptrend less likely. May see some support at bottom for intraday traders/ scalpers.

NIFTY MIDCAP Select Index: The index has a strong support at 13160-180 zone and once the support is cleared we can expect the index heading towards 13050-13000 mark. The intraday resistance is placed at 13300 levels. Stay short on pullback with stop loss above 13300 mark.

Also Read: NIFTY Crosses 26K Mark, Reaches New ATH; Broader Market Sentiment Remains Indecisive