CLOSING BELL: The Nifty 50 declined 0.88% to close at 22,421, while the Sensex fell 0.79% to 71,909
Mumbai, 1 OCTOBER: Indian equities are likely to stay under pressure in the near term as a record global bond rout, renewed strength in crude and the heaviest foreign selling in six months weigh on sentiment. The US 10-year Treasury yield has broken past its 2007 peak to 5.3%, the highest since April 2002, with the 30-year at 5.6%. With Nifty’s earnings yield now below what US government debt pays, a sustained recovery is unlikely until global yields stabilise, crude eases and foreign outflows moderate. The Nifty fell 0.9% to 22,422, touching an intraday low of 22,217, extending its losing run to an eighth straight week with a 3.1% weekly decline.
The Midcap100 and Smallcap100 each fell 1%. IT was the lone sector to advance 2.1%, while Auto was the top sectoral loser at -3.5%, Bajaj Auto fell 7.6% on weak September domestic volumes and Nifty Metals (-2.3%) and Media (-2.3%). FIIs sold Rs 10,148 crore on Wednesday, the largest single-day outflow in nearly six months and a fifth consecutive session of selling. DIIs absorbed it with Rs 11,272 crore of buying, the highest of the month. Crude turned higher again, with Brent back above the USD 100 mark at $100.7/bbl, up 2.7%, after Chinese refiners suspended October product exports beyond Hong Kong and Macau through the Golden Week holiday to protect domestic supply.
The manufacturing PMI rose to a seven-month high of 55.1 from 52.8, with the sharpest output expansion in four months and hiring at its fastest since May. GST collections crossed Rs 2 lakh crore for a third straight month, up 14.7% to Rs 2.04 lakh crore. The PMI’s Q2FY27 average of 53.8 is the weakest since 2021, and the GST growth is import-led, with import revenue up 25.9% against domestic growth of 10.1%. On policy front, the Cabinet cleared the Rs 1.86 lakh crore PM-DHARA (Green Energy Corridor) scheme Phase III to evacuate 135 GW of renewable energy and deploy 50 GWh of battery storage by FY33, with Rs 54,082 crore of central support. The market read it selectively, bidding up transmission and equipment names by as much as 10% while power generation stocks fell. Next week’s defining event is the RBI policy and the GST Council meeting on GST 2.0 process reforms on Wednesday 7th October, while globally the US jobs report and the trajectory of Treasury yields remain the key drivers. Indian markets are closed on Friday, 2 October, on account of Gandhi Jayanti.
Benchmark indices witnessed a sharp sell-off followed by a minor recovery, with the market extending its losing streak to the eighth consecutive week. Market breadth deteriorated further, while India VIX spiked, reflecting heightened volatility. IT was the only sector to remain resilient, while elevated US 10-year Treasury yields and Brent crude oil prices above $100 remained key risks for investor sentiment.
On the sectoral front, IT remained the key gainer, while Auto, Metal, FMCG and Realty were among the major laggards.
The broader market also witnessed significant selling pressure, with the Nifty Midcap 100 declining 1.01% to 58,732 and the Nifty Smallcap 100 falling 0.97% to 19,058.
Nifty Outlook: Failure to move above 22,610 will lead to some consolidation in the range of 22,600-22,200 levels
Nifty formed a sizable bearish candle with a long lower shadow highlighting intraday volatility. The index maintained lower high and a lower low signaling continuation of the downward bias. Nifty opened on a negative note and dragged sharply lower in the first half of the trade to form an intraday low of 22,217. Index recovered some of the intraday decline in the last hour to close at 22421.95. The index in the process extended its losing streak for the eighth consecutive week. Immediate bias in the index continues to remain down and a follow through weakness will signal extension of decline towards the 22,000 and CY2025 low of 21743.
A move above Thursday’s high of 22,610 will signal a pullback towards the 22,800 and 23,000 levels. However, for a meaningful trend reversal index would require forming a sustained Higher High–Higher Low structure and reclaim the 23,000-23,100 level. Failure to move above 22,610 will lead to some consolidation in the range of 22,600-22,200 levels.
Bank Nifty Outlook: Index has key short-term support at 53,500-53,000
Bank Nifty formed a high wave candle with a small real body and long shadows in either direction highlighting intraday volatility. Bank Nifty relatively outperformed and closed the session marginally lower by 0.3%.
Going ahead, a follow through pullback above Wednesday and Thursday’s high 55,135 will signal extension of the pullback towards 55,600 and 56,000 levels in the coming sessions being the recent breakdown area.
Failure to move above Thursday’s high will signal some consolidation in the range of 53,500-55,100 levels in the coming sessions ahead of the RBI monetary policy outcome during next week. Index has key short-term support at 53,500-53,000 being the confluence of the previous major lows and measuring implication of the recent range breakdown (58,500-56,000).
(Disclaimer: The information provided here is investment advice only. Investing in the markets is subject to risks and please consult your advisor before investing)
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