The benchmark Sensex and Nifty indices are likely to open marginally lower on October 4 as trends in the GIFT Nifty indicate a negative start for the broader index with a loss of 10 points.
The BSE Sensex declined 316 points to 65,512, while the Nifty50 dropped 110 points to 19,529 amid volatility and formed a bearish candlestick pattern with a minor lower shadow on the daily charts, making lower high, lower low formation in the previous close. The index settled below the 50-day EMA (exponential moving average placed at 19,560).
“Towards the downside, the index found support at the ascending trendline on the daily chart. The sentiment looks pessimistic for the short term,” Rupak De, senior technical analyst at LKP Securities said.
Looking ahead, he feels the level of 19,480 is expected to serve as a pivotal “make or break” point. If there is a decisive decline below 19,480, it might trigger heavy selling in the market, he said, adding on the upside, 19,600 will continue to remain a significant resistance level.
The pivot point calculator indicates that the Nifty may be taking support at 19,489, followed by 19,455 and 19,400. On the higher side, 19,599 can be an immediate resistance, followed by 19,633 and 19,687.
Stay tuned to Moneycontrol to find out what happens in the currency and equity markets today. We have collated a list of important headlines across news platforms, which could impact Indian as well as international markets.
GIFT Nifty
The GIFT Nifty indicates a marginally negative start for the broader index with a loss of 10. GIFT Nifty futures stood at 19,444 points after making a high of 19,454 points.
Trade setup for Wednesday: Top 15 things to know before the opening bell
US Markets
Stock futures are near flat Tuesday night following a tough session that dragged the Dow Jones Industrial Average into negative territory for 2023. Futures tied to the 30-stock index added 3 points, trading near flat. S&P 500 futures and Nasdaq 100 futures were also both little changed.
The moves follow a losing session on Wall Street after job openings data indicated the labor market is still strong and bond yields marched higher. The Dow lost 1.3 percent, notching its worst session since March. The S&P 500 tumbled 1.4 percent and at one point hit its lowest level since June. The Nasdaq Composite ended 1.9 percent lower. Those losses pulled the Dow into the red on the year: It’s now off 0.4 percent. The S&P 500 and Nasdaq are up more than 10 percent and 24 percent, respectively, for 2023.
European Markets
European stock markets closed lower Tuesday as investors digested gloomy economic data from the region. The regional Stoxx 600 index ended down 1.1 percent, with all sectors and major bourses in negative territory. The debt-heavy utilities sector dropped 2.7 percent with higher-for-longer rates in focus, while mining stocks were down 2.6 percent.
Stocks have failed to shake off their August and September gloom at the start of the new month, with the Stoxx declining Monday as data revealed an outgoing downturn in manufacturing output, as new orders fell by a near-record level.
In Asia-Pacific markets overnight, Hong Kong stocks fell about 3%, leading wider losses in the region. Hong Kong’s Hang Seng index traded 3.12 percent lower after coming back from a National Day holiday on Monday.
US stocks were lower as traders closely monitored rising Treasury yields, which hit a 16-year high. The 10-year Treasury yield, a benchmark for mortgage rates and guage of investors’ economic confidence, briefly touched its highest level since 2007.
Asian Markets
Hong Kong stocks led Asia-Pacific markets lower on Tuesday, in their return from a National Day holiday on Monday. The city’s benchmark Hang Seng index closed 2.69 percent lower at 17,331.22, recovering slightly from earlier in the session when it was down more than 3 percent.
In Australia, the S&P/ASX 200 traded down 1.28 percent to close at 6,943.4 after the central bank held rates at 4.10 percent, as expected by a Reuters poll. In Japan, the Nikkei 225 dropped 1.64 percent to close 31,237.94. South Korean and Chinese markets are closed for holidays.
Overnight in the US, all three major indexes traded mixed. The Dow Jones Industrial Average declined 74.15 points, or 0.22 percent, to 33,433.35. The S&P 500 inched higher by 0.01 percent to close at 4,288.39. The Nasdaq Composite added 0.67 percent to close at 13,307.77.
MPC likely to hold repo rates at 6.50% in October policy: Economists poll
The Monetary Policy Committee (MPC) is likely to hold the repo rate at 6.50 percent and maintain a ‘Withdrawal of Accommodation’ stance in the upcoming October monetary policy, a Moneycontrol poll of at least 10 economists, bankers and fund managers has shown.
This is on account of the moderation in Consumer Price Index (CPI) Inflation in August and stable economic activity, a majority of the economists who participated in the poll, said.
“The RBI will have little reason to change the current policy settings, and we expect the MPC to keep the repo rate unchanged at 6.5 percent, flagging waning core inflation, steady economic activity, and some risks of more supply-related price shocks, providing a little cue for a change in policy thinking,” said Rahul Bajoria, MD & Head of EM Asia (ex-China) Economics, Barclays.
“The RBI monetary policy committee (MPC) is expected to extend its hawkish pause and keep the ‘withdrawal of accommodation’ stance, at the upcoming policy review on October 6,” said Radhika Rao, Senior Economist, DBS Bank India. The six-member Monetary Policy Committee (MPC) of the RBI will meet from October 4 to 6, to decide on the interest rates.
Abu Dhabi-based IHC raises stake in Adani Enterprises to over 5%
Days after selling its stake in two of the Adani Group companies, Abu Dhabi-based conglomerate International Holding Company (IHC) on October 3 said it has raised its stake in the group’s flagship Adani Enterprises Ltd to above 5 percent.
In a filing to the Abu Dhabi stock exchange, IHC said, “This strategic increase reflects IHC’s conviction in the world leading incubation model of AEL.”
Stating it has increased its stake in AEL to above 5 percent, it said it believes that “the inherent strength of airports, data centres, green hydrogen and various other verticals being incubated under AEL is poised to uniquely capitalise on India’s robust growth journey.”
“IHC continues to explore unique investment opportunities in India with the goal to maximize stakeholders’ return,” the filing added.
Sebi to introduce centralized system for reporting, verifying death of an investor
Market regulator Sebi has announced the introduction of a centralized system for reporting and verifying the death of an investor. This is aimed at streamlining the process of transferring assets in the securities market.
This circular shall come into effect from January 01, 2024. The circular by Sebi lists out the operational norms to guide registered intermediaries that have an interface with ‘investors’ or ‘account holders’. It says that once the intermediary receives the information about the demise of an investor, it shall have to first obtain the death certificate along with the PAN from the notifier and execute several other steps to streamline the process.
Maruti Suzuki receives Rs 2,160 crore draft income tax assessment order
Maruti Suzuki India Limited received a Draft Assessment Order for Rs 2159.70 crore dated October 3 from the Income Tax Authority, the company said in a BSE filing. The draft assessment order is for the financial year 2019-20, it said.
When the assessing officer finds any variance to the income or loss stated in the return filed by the assessee, he proposes a Draft Assessment Order to invite the assessee’s objection or acceptance.
“The company has received draft Assessment Order for the FY 2019-20 wherein certain additions/ disallowances amounting to Rs 2159.70 crore with respect to returned income (the income disclosed by the Company in its Income Tax return) have been proposed,” Maruti Suzuki India Ltd said in the statement.
HDFC Bank revamps top management after mega merger
HDFC Bank Ltd. is revamping some parts of top management as the Indian bank seeks to propel its mortgages business, three months after it acquired another lender. The bank detailed the changes in a memo to employees late Sunday, according to people familiar with the matter, who asked not to be identified discussing private information.
It has brought information technology and digital functions, led by Ramesh Lakshminarayanan directly under Chief Executive Officer Sashidhar Jagdishan as the bank leans on technology to offer more products and services across its branches, the people said. Ashish Parthasarthy a bank veteran who has led treasury since 2009, will get responsibility for the key retail branch business, which handles deposits and product distribution, they added.
The lender’s shares have come under pressure since the takeover of Housing Development Finance Corp. in July, which made HDFC one of the world’s largest banks. It also faced a rare downgrade last month from Nomura Holdings Inc., which cited concerns on HDFC’s return on assets and pressures on loan growth.
Vedanta has finance lined up for repaying debts due in CY24, says Anil Agarwal; sale of steel, iron businesses eyed
Vedanta Group has made arrangements to repay the group’s debt obligations falling due in the next year 2024, said Anil Agarwal, Chairman of Vedanta Resources. In an interview with CNBC-TV18, Agarwal mapped out Vedanta’s timeline for debt repayment, and the sale of businesses to raise financing. The conglomerate had announced the demerger of its business on September 29.
“We have payment coming due in January (2024) and August. We are completely lined up. We have a 1 billion dollar payment in January and a 500-600 million dollar payment in August. Both are completely lined up. We are looking for ways to reduce debt,” said Agarwal, in an interaction days after announcing a mega demerger plan to split the group’s businesses into six independent entities.
Agarwal said the sale of the steel and iron ore business could help reduce the debt. “We had a phenomenal response for our steel and iron ore sale. This can help take care of our debt. We believe that by March, we will be able to complete the sale transaction.”
Oil Prices
Oil prices recovered slightly after hitting a three-week low on Tuesday, as investors weighed a stronger US dollar, darkening global economic signals and tightening supply. Brent crude oil futures were down 10 cents to $90.61 a barrel, after falling to a session low of $89.50, the lowest since Sept. 8. US West Texas Intermediate crude, gained 37 cents to $89.19 per barrel. Earlier in the session, prices fell to $87.76, weakest since Sept. 12.
Weighing on prices, the US dollar rose to a 10-month high against a basket of major peers after the US government avoided a partial shutdown and economic data fueled expectations the Federal Reserve will keep rates higher for longer, or even hike them again.
“We have seen an incredible increase in the yields and the dollar and that’s raised concerns about demand going forward,” said Price Futures Group analyst Phil Flynn.
Dollar Index
The Dollar index traded 0.20 percent higher in futures at 107.12, whereas the value of one dollar hovered near Rs 83.24.
Gold Prices
Gold prices languished near a seven-month low on Tuesday, weighed down by a robust dollar and elevated bond yields as the likelihood of US interest rates staying higher for longer dominated sentiment. Spot gold was down 0.3 percent at $1,822.42 per ounce, its lowest level since early March. US gold futures shed 0.4 percent to $1,840.00 per ounce. US job openings unexpectedly increased in August, pointing to tight labour market conditions that could compel the US Federal Reserve to raise interest rates next month.
“The JOLTS report has surprised the market as it raises prospects of another hike but also lowers expectation of a slowdown in the U.S. economy, pressuring precious metals,” said Edward Moya, senior market analyst at OANDA.
Gold is considered a hedge against inflation and economic uncertainties. But higher interest rates raise the opportunity cost of holding bullion, which is priced in dollars and does not yield interest. Gold prices briefly ticked up earlier in the session as the dollar sharply weakened against the yen, just moments after briefly rising above 150 for the first time since October 2022, signaling a possible intervention by the Bank of Japan. “If the Bank of Japan intervenes, it could weaken dollar in the short term and provide some support to the precious metals,” Moya added.
FIIs and DIIs
Foreign institutional investors (FII) offloaded shares worth Rs 2,034.14 crore, while domestic institutional investors (DII) purchased Rs 1,361.02 crore worth of stocks on October 3, provisional data from the National Stock Exchange (NSE) showed.
(With inputs from Reuters and other agencies.)
