Dear Subscribers,
This week, the market turned sharply bearish, with the Nifty 50 experiencing its largest weekly drop in over two years. Several global and domestic factors contributed to this decline, shaking investor sentiment.
Global Macro Factors 🌍
The geopolitical tension in the Middle East, with escalating conflicts between Iran and Israel, has taken a toll on global markets. As a result, crude oil prices surged by more than 8%, now hovering near $78 per barrel. Gold continued its upward trend, rising by 1.20% to trade around $2,666, showing strength amid global uncertainty.
The dollar index also saw a notable increase, climbing by 1.73% to 102.52. Meanwhile, the rupee hit an all-time low, with USD/INR rising by 0.33% to reach 84.00. This weakening of the rupee was compounded by the US 10-year Treasury yield, which increased to 3.98% from 3.75% last week, signaling further challenges for equity markets.
The S&P 500 fell by 0.49%, now trading below the 5731 level.
However, on a positive note, India’s forex reserves reached a record high of $704.89 billion, marking a significant increase of $12.5 billion for the week ending September 27. This achievement places India among the top four countries with forex reserves exceeding $700 billion.
Market Performance 📈
The market faced a heavy sell-off this week, with all broader indices dropping by over 2.5%. Large-cap stocks were particularly hit hard. This sharp decline was driven by multiple factors, including geopolitical concerns in the Middle East and China’s economic slowdown. Foreign Institutional Investors (FIIs) pulled out over ₹30,000 crore from the cash market, adding to the pressure.
– Nifty 50: Fell by a significant 4.45%, the steepest weekly drop in the last 24 months.
– Nifty 100: Down by 4.40%.
– Nifty 500: Decreased by 3.90%.
– Nifty Midcap 100: Declined by 3.16%.
– Nifty Smallcap 100: Dropped by 2.51%.
Top Losers
– Reliance led the Nifty 50’s fall, dropping by 9.2%.
– Lodha and SWSOLAR were the biggest losers in the Nifty 100 and Nifty 500 indices, declining by 9.66% and 15.65%, respectively.
– Phoenix Mills and SWSOLAR were the top losers in the midcap and smallcap spaces.
Sector Analysis 📊
This week saw widespread weakness across sectors, with almost all major indices ending in the red. The only exception was the metal sector, which showed some resilience. Ten sectoral indices dropped by more than 3%, signaling broad-based selling pressure.
– Nifty Realty was the worst performer, plummeting by 7.69%.
– Auto followed with a decline of 6.10%.
– Energy and Finance sectors also fell by over 5%.
We anticipate that the upcoming Q2 FY25 earnings reports will play a key role in determining the market’s direction moving forward.
Key Earnings to Watch
The earnings season for the September quarter kicks off next week, with major companies such as TCS, Tata Elxsi, DMart, and IREDA reporting their results. This will be a critical factor in determining the short-term market trajectory.
Sectors to Watch
– PSU Banks
– Metals
That’s it for this week. Stay vigilant, manage risk effectively, and happy trading!
Best regards,
Mayank Singh Chandel
SEBI Registered Research Analyst
INH000013350