Sensex and Nifty50 Open in Red Amid Earnings Slowdown and Global Cues
On Wednesday, the Indian stock markets, represented by Sensex and Nifty50, opened in the red due to a slowdown in earnings and global influences affecting investor confidence. Nifty50 started at 23,822.45, while BSE Sensex began at 78,495.53. This marked the fourth consecutive day of market declines, driven by weak earnings and foreign fund outflows.
In the early trading hours at the National Stock Exchange (NSE), stocks like NTPC, Bharti Airtel, HDFC Bank, Tata Motors, and Asian Paints showed gains. However, Mahindra and Mahindra saw a significant drop of over 2.42%, along with Maruti, BPSL, Apollo Hospitals, and Nestle India.
Sector-wise, Bank, Financial Services, IT, and Private Banks opened positively, while others remained in the red. Domestically, investor sentiment was affected by India’s retail inflation, which rose to a 14-month high of 6.21% in October, up from 5.49% in September. This increase in inflation is above the Reserve Bank of India’s (RBI) target range, reducing the likelihood of a rate cut in the upcoming monetary policy review from December 4-6.
India’s Index of Industrial Production (IIP) showed a 3.1% growth in September, improving from a 0.1% contraction in August. Varun Aggarwal, MD of Profit Idea, noted that investors are awaiting key US inflation data, which will influence the Federal Reserve’s interest rate decisions, adding to global market volatility.
Akshay Chinchalkar, Head of Research at Axis Securities, highlighted the critical support zone for Nifty between 23,700 and 23,779. A failure to hold this zone could bring the 200-day average into focus, which is about 1.5% below Tuesday’s close. Despite recent declines, daily momentum is not overstretched, while weekly momentum signals are the most oversold since March last year.
Globally, markets showed signs of fatigue, with Wall Street’s momentum fading post-US presidential election results. The S&P 500 and Dow Jones ended their five-day winning streaks, closing lower on Tuesday. Asian markets also traded lower, mirroring Wall Street’s losses, as US indices ended in the red, awaiting inflation data.
Looking ahead, market participants are closely watching the second quarterly results of major companies like Apollo Tyres, Rashtriya Chemicals and Fertilisers, PI Industries, and AstraZeneca Pharma. Other companies such as Western Carriers India, Brigade Enterprises, Deepak Nitrite, Bayer CropScience, Thermax, Thomas Cook (India), and Senco Gold will also announce their financials for the second quarter.
Doubts Revealed
Sensex -: Sensex is a stock market index in India that represents 30 well-established and financially sound companies listed on the Bombay Stock Exchange (BSE). It helps investors understand how the stock market is performing.
Nifty50 -: Nifty50 is another stock market index in India, but it represents 50 major companies listed on the National Stock Exchange (NSE). It is used to gauge the overall health of the Indian stock market.
Open in Red -: When the stock market ‘opens in red,’ it means that the prices of many stocks have decreased compared to the previous day. This is often seen as a negative start to the trading day.
Earnings Slowdown -: Earnings slowdown refers to a situation where companies are making less profit than before. This can make investors worried and cause stock prices to drop.
Global Cues -: Global cues are signals or trends from international markets that can affect the Indian stock market. For example, if the US stock market is doing poorly, it might influence Indian markets to do the same.
Inflation -: Inflation is when the prices of goods and services increase over time, making things more expensive. High inflation can affect how much money people have to spend and can impact the stock market.
Investor Sentiment -: Investor sentiment is how investors feel about the market. If they are worried or negative, they might sell stocks, causing prices to fall.
US Inflation Data -: US inflation data shows how much prices are rising in the United States. This information can affect global markets, including India, because the US economy is very influential.
Quarterly Results -: Quarterly results are financial reports that companies release every three months. They show how well a company is doing and can influence stock prices.
