Indian stock market has witnessed one heck of a bearish month with Sensex and Nifty 50 nosediving by approximately 3% each. Selling pressure from FIIs coupled with sluggish quarterly earnings and overvaluation are some of the key draggers of domestic equities. The next key event is the US election scheduled on November 5, 2024. Owing to deep correction, the key support level for Sensex and Nifty 50 is around 78500 and 23800 respectively.
Sensex, Nifty Price:
On November 4th, just ahead of US election, Sensex nosedived by 941.88 points or 1.18% to close at 78,782.24. While Nifty sheds 309 points or 1.27% to end at 23,995.35.
These Indian benchmarks have been consolidating since October month. In 1-month session, Sensex has dipped by 2,267.76 points or 2.80%, and that of Nifty 50 has plunged by 800.40 points or 3.23% to end at 23,995.35.
Explaining in detail, Vinod Nair, Head of Research, Geojit Financial Services said, as expected, India is underperforming its global peers due to excess valuation. The ongoing selloff has deepened by weak Q2 earnings, dampening investor sentiment. Continued volatility is anticipated in the short-term, as attention shifts to the closely contested US presidential election. Additionally, key economic events, such as the US Fed and BoE policy decisions, will be critical in shaping market movements.
US Election 2024:
The United States Presidential Election 2024 is all set to take place on Tuesday, November 5, 2024. All eyes will be on Kamala Harris and Donald Trump who are in a face-off for the presidential seat. Kamala represents the Democrats, while Trump comes from the Republican party. The 2024 election is crucial and its results matter even more so for the global economy.
What To Expect In Indian Stock Market Due To US Election?
For November 5th session, Shrikant Chouhan, Head Equity Research, Kotak Securities said, "We are of the view that, the current market texture is weak but oversold hence strong possibility of one intraday pullback rally is not ruled out from the current levels. For the day traders now, 23800/78500 would be the key support zone. Above the same, it could bounce back till 24050-24100/79000-79200. On the flip side, fresh selloff possible only after dismissal of 23800/78500. Below the same, the market could slip till 23700-23625/78100-77700."
Additionally, Ajit Mishra - SVP, Research, Religare Broking said, the breakdown of Nifty's recent consolidation range of 24,000-24,500, along with a noticeable increase in the volatility index (India VIX), reflects growing pessimism among participants. Should Nifty sustain levels below 24,000, it may move toward the next significant support, the 200-day Exponential Moving Average (DEMA) around 23,500. Traders are advised to adjust positions accordingly, prioritizing risk management amid the expected rise in volatility.
Meanwhile, Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services is expecting markets to remain subdued on the back of several global events, consistent FII selling and tepid earnings by domestic companies so far. This week will be crucial as lot of index heavy weight including will announce results and could lead to stock specific action.
For investors, Choice Broking said, he Nifty is trading below the 100-day Exponential Moving Average (EMA), raising the likelihood of further corrections toward the 23,650 level. The Relative Strength Index (RSI) is at 31, indicating potential room for additional downside in the near term. Continuous selling by Foreign Institutional Investors (FIIs) has further exacerbated market volatility, with the volatility index (VIX) now at 16.68, highlighting the uncertain conditions investors face.
Mandar Bhojane, Equity Research Analyst at Choice Broking said, for investors, this market correction presents an opportunity to acquire quality stocks at lower levels, particularly if the Nifty can hold above the critical support zones of 24,000 and 23,650. These levels may provide strong buying opportunities for long-term growth as the correction nears its conclusion. Looking ahead, if the market stabilizes, the Nifty is projected to target levels of 25,500 and 26,500, offering significant upside potential for long-term investors.
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