Stock Market Today, October 14, 2024: Indian equity indices, including Nifty50 and BSE Sensex, are expected to begin the day on a positive note, buoyed by mixed signals.
At 6:41 AM, GIFT Nifty Futures indicated a modest increase of 53 points, reaching 25,102 levels, suggesting a positive start for the Indian markets.
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Key drivers for today
Back home, investors will watch out for inflation and wholesale inflation figures for September today.
The retail inflation for September is anticipated to exceed the Reserve Bank of India’s (RBI) 4 per cent medium-term target for the first time since July, primarily due to escalating vegetable prices and a favourable year-ago comparison, according to a Reuters poll. Heavy rains have affected the supply of essential crops, leading to increased food prices.
Q2 earnings
Major players like HCL Tech and Reliance Industries Ltd (RIL) are set to report their Q2 results today. HCL Tech, India’s third-largest IT firm, is expected to show a modest single-digit increase in both topline and bottomline compared to the same quarter last year. Brokerages note that while its products business may struggle, growth in the services segment could balance the impact. Analysts predict a year-on-year decline in total contract value (TCV).
For RIL, analysts forecast a challenging quarter due to weak refining margins, with expected profit declines ranging from 1 per cent to 13 per cent from the previous year, although Kotak Institutional sees a modest 2.2 per cent profit rise. Revenue growth is projected to reach a maximum of 4 per cent.
Other firms, including Alok Industries and Angel One, will also announce their earnings today.
Wipro board meeting
Wipro board, on Sunday, October 13, announced that it will consider a proposal for a bonus share issue during its meeting on October 16-17. The IT major is scheduled to release its September quarter results on October 17.
Wall Street update
US stock futures remained stable overnight as investors geared up for important corporate earnings reports.
Futures for the Dow Jones Industrial Average were flat, while S&P 500 index futures showed little movement. Nasdaq futures dipped slightly by 0.1 per cent.
Early third-quarter earnings from JPMorgan Chase and Wells Fargo were positive, helping push the market to record highs last week, with the S&P 500 closing above 5,800 for the first time.
Overall, the S&P 500 rose 0.61 per cent, the Dow Jones increased 0.97 per cent, and the Nasdaq gained 0.33 per cent.
Looking ahead, key economic data, including September retail sales and industrial production figures, will be released on Thursday, followed by September housing starts and building permits on Friday.
Asian markets update
Markets across the Asia-Pacific region opened mostly higher, tracking Wall Street’s recent performance.
Kospi rose 0.78 per cent while ASX 200 was up over 0.3 per cent. Nikkei remained closed today on account of Sports Day.
Investors are also reacting to Beijing’s recent commitment to ‘considerably increase’ debt to stimulate its struggling economy, although the specifics of the stimulus package remain unclear.
The renewed optimism follows a tough Friday for Chinese stocks, with the blue-chip CSI300 index closing down 2.8 per cent. For the week (last week), the CSI300 saw a decline of 3.3 per cent. Despite this, the index has gained over 20 per cent in the past month, driven by stimulus-related updates.
In Singapore, the central bank maintained its monetary policy settings as anticipated, reporting that the economy accelerated in the third quarter. The Monetary Authority of Singapore (MAS) confirmed it will uphold the current rate of appreciation for its exchange rate-based policy, known as the Nominal Effective Exchange Rate (S$NEER).
Additionally, advance estimates from the trade ministry indicated a 4.1 per cent rise in GDP for the third quarter compared to the previous year, following a 2.9 per cent annual growth in the second quarter.
Traders will also be watching for Chinese import and export data for September, set to be released today.
Oil prices update
US crude oil posted its second consecutive weekly gain on Friday as tensions in the Middle East escalated, particularly with Israel preparing to retaliate against Iran.
Both the US benchmark and global benchmark Brent crude gained over 1 per cent last week, with prices rising more than 10 per cent since Iran launched ballistic missiles at Israel the previous week.
Therefore, West Texas Intermediate (WTI) for November is priced at $75.56 per barrel, down 29 cents (0.38 per cent). Meanwhile, Brent crude for December is trading at $79.04 per barrel, down 36 cents (0.45 per cent).
Gold prices
In the gold market, prices rose on Friday, driven by US inflation data that bolstered expectations for interest rate cuts this year, leading to a weaker dollar. Additionally, safe-haven demand stemming from ongoing geopolitical tensions in the Middle East supported gold prices.
Currently, spot gold futures increased by 1 per cent to $2,656.09 per ounce, marking its second consecutive day of gains. US gold futures also saw a rise of 1.3 per cent, reaching $2,674.40 per ounce.
Other triggers for the week
Several key economic indicators will be monitored in the coming days. On October 15, trade data from Korea, Japan’s industrial production figures for August, and Britain’s unemployment rate for August will be released.
The following day, October 16, will see the publication of Korea’s September unemployment rate, along with Britain’s inflation and core inflation figures for August, as well as US export and import prices for September.
On October 17, traders will focus on Japan’s trade data, US initial jobless claims for the week ending October 12, and reports on retail sales, industrial production, and manufacturing production in the US for September.
Finally, on October 18, Japan’s inflation and core inflation for September, along with China’s house prices for September and Q3 GDP data, will be in the spotlight. Additionally, India’s forex reserves for the week ending October 11 will also be closely watched.
IPO Updates
FII, DII activity
On October 11, foreign institutional investors (FIIs) sold shares worth Rs 4,162.66 crore, while domestic institutional investors (DIIs) bought shares worth Rs 3,730.87 crore.
Markets on Friday, October 11
In the previous session, the BSE Sensex closed at 81,381.36, down 230.05 points (0.28 per cent), and the NSE Nifty50 ended at 24,964.25, down 34.20 points (0.14 per cent). However, the BSE MidCap and SmallCap indices outperformed the benchmarks, each gaining 0.44 per cent.
Here’s how analysts are assessing today’s (October 14) trading session:
Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates
On the daily chart, the index formed a small red candle, indicating uncertainty. However, the index is still holding above the low of the inside bar candle, as well as the 75-Days Exponential Moving Average support. Thus, as long as the index holds above the low of 24,690, levels of 25,150–25,350 could be possible. However, a close below 24,690 could lead to a fresh breakdown.
Amol Athawale, VP-Technical Research, Kotak Securities
In the near future 50-day SMA (Simple Moving Average) or 25050/81900 would act as a sacrosanct level. If the market succeeds to trade above the same, then it could move up till 25250 -25400/82500-83000. On the flip side, as long as it is trading below the same, the weak sentiment is likely to continue. Below which, it could retest the level of 24700/80700. Further down side may also continue which could drag the index till 24550/80200. For Bank Nifty, 50 day SMA or 51500 would be the trend decider level. Above the same, it could bounce back till 52000-52300. On the flip side, below 50900 it could slip till 50500-50250.
Ravi Nathani, Independent Analyst
The Nifty 50 Index is expected to trade within a well-defined range between 25235 and 24700. While this might signal indecisiveness in the market, the unique setup of multiple technical indicators suggests that a bullish breakout could be imminent. Indicators such as RSI, Stochastic, and MACD are currently positioned in the oversold zone, signalling that a recovery is likely. Typically, in a range-bound market, the strategy would be to buy near support and sell near resistance. However, given the technical setup, this time presents an opportunity to accumulate the index and its constituents on dips, especially near the lower end of the range. The oversold condition in key indicators implies that any downward move would offer a buying opportunity rather than a selling one. If the lower level of the range at 24700 is broken, it is likely to trigger a positive move on the RSI, further enhancing the possibility of a bullish divergence on RSI resulting in a buy for near term. The overall outlook is optimistic, with the potential for outperformance by the end of the week. Traders should focus on buying into dips and accumulating positions in anticipation of a recovery and near-term bullish movement.