Indian markets close marginally lower; Tech stocks lead gains

The Indian stock market ended marginally lower on Tuesday, October 1, 2024, after a volatile trading session marked by sector-specific movements.

The benchmark Nifty 50 index closed at 25,796.90, down 13.95 points or 0.05 per cent, while the BSE Sensex settled at 84,266.29, shedding 33.49 points or 0.04 per cent.

Despite the subdued performance of the headline indices, broader markets outperformed, with the BSE Midcap and Smallcap indices gaining 0.3 per cent and 0.5 per cent respectively.

The market breadth remained positive, with 2,296 stocks advancing against 1,668 declines on the BSE.

Tech stocks led the gains, with Tech Mahindra surging 2.90 per cent to emerge as the top gainer on the Nifty.

Other IT majors like Infosys also performed well, climbing 1.62 per cent.

The Nifty IT index rallied over 1 per cent, benefiting from positive remarks by Federal Reserve Chair Jerome Powell regarding the strength of the U.S. economy.

Mandar Bhojane, Technical Research Analyst at Choice Broking, commented on the day’s trading pattern: “On the daily chart, Nifty formed an inverted hammer candlestick pattern below the previous day’s candle, indicating that the bulls are losing strength. This suggests a continuation of the sideways to bearish trend, with a focus on stock-specific movements while the index corrects.”

The market saw mixed sector performance, with media and auto stocks joining IT in the gainers’ list. However, telecom, power, FMCG, oil & gas, and realty sectors faced selling pressure.

Among individual stocks, the top gainers on the NSE were Tech Mahindra (2.90 per cent), Mahindra & Mahindra (2.90 per cent), Britannia (1.80 per cent), Infosys (1.62 per cent), and Adani Enterprises (1.50 per cent).

On the flip side, the top losers on the NSE were IndusInd Bank (-2.66 per cent), ONGC (-1.75 per cent), Asian Paints (-1.63 per cent), Bajaj Auto (-1.38 per cent), and Tata Steel (-1.10 per cent).

In the Sensex pack, the top gainers were Tech Mahindra (2.93 per cent), Mahindra & Mahindra (2.22 per cent), Infosys (1.50 per cent), Kotak Mahindra Bank (1.48 per cent), and State Bank of India (1.19 per cent).

The major losers among Sensex stocks were IndusInd Bank (-2.68 per cent), Asian Paints (-1.54 per cent), Hindustan Unilever (-1.27 per cent), Tata Motors (-0.96 per cent), and Tata Steel (-0.86 per cent).

The volatility index, India VIX, cooled off significantly, falling 6.26 per cent to settle at 11.9875, indicating reduced market nervousness. Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C.

Mehta Investment Intermediates Limited stated, “If the index closes above the doji high of 25,910, the upward movement could potentially extend to the 26,200–26,500 range.”

Tejas Shah, Technical Research analyst at JM Financial & BlinkX, provided insight on potential support and resistance levels: “Support for Nifty is now seen at 25,650-700 and 25,450-500. On the higher side, immediate psychological resistance is at 26,000 levels and the next resistance zone is at 26,125-150 levels.”

The banking sector showed relative weakness, with the Bank Nifty closing marginally lower at 52,922.60, down 55.50 points or 0.10 per cent. Yedve added, “As long as the index holds the support of 52,735 (21-DEMA), a ‘buy on dips’ strategy can be initiated.”

Foreign institutional investors (FIIs) were net sellers on September 30, 2024, with a net outflow of ₹9,791.93 crore, as their sales amounted to ₹26,412.70 crore, surpassing purchases of ₹16,620.77 crore.

In contrast, domestic institutional investors (DIIs) were net buyers, with a net inflow of ₹6,645.80 crore, driven by purchases worth ₹17,880.53 crore against sales of ₹11,234.73 crore.

Market participants are closely watching upcoming economic data releases, including U.S. non-farm payrolls and domestic GST data, which could influence market sentiment in the coming days.

Additionally, investors continue to digest Powell’s comments on interest rates and monitor ongoing global geopolitical tensions.

Indian markets will be closed on Wednesday, October 2, 2024, in observance of Gandhi Jayanti.

As the market navigates through mixed cues and sector-specific movements, analysts advise caution and suggest a level-based trading approach. Shrikant Chouhan, Head of Equity Research at Kotak Securities, emphasized, “The current market texture is non-directional, hence level-based trading would be the ideal strategy for day traders.”