Indian Stock Markets Experience Decline After Four-Week Winning Streak Amid Mixed Global Signals

Indian stock markets ended their four-week winning streak with a slight decline, influenced by mixed global signals. The Nifty closed at 25,722.10, while the Sensex settled at 83,938.71. This downturn was driven by various factors, including mixed corporate earnings and cautious global sentiment due to a strong US dollar and hawkish comments from US Fed Chair Powell.

Additionally, disappointing trade developments between the US and China, along with renewed selling by Foreign Institutional Investors (FIIs), added to the market's volatility. Investors are also closely watching the upcoming HSBC Manufacturing PMI and Services PMI data, as well as Q2 results from major companies like Bharti Airtel, Titan Company, and Adani Enterprises.

Om Mehra, Technical Research Analyst at SAMCO Securities, noted that the Nifty index ended October with a 4.51% gain but slipped 0.28% for the week. "The index formed a shooting star candle on the weekly chart, indicating early signs of exhaustion after a strong run," he said. This pattern suggests a potential short-term correction in the coming sessions.

Mehra further explained that the Nifty's daily RSI stands at 58, showing moderation in momentum. Immediate support is near 25,500, and a decisive breach below this level could confirm a double-top breakdown. A sustained move above 26,000 is needed to restore strength and upward momentum.

Regarding Bank Nifty, Mehra highlighted that it closed October with a 5.75% gain but showed hesitation near higher levels. "The index displayed visible fatigue on the daily chart," he said. A negative RSI divergence hints at waning momentum even as prices hover near recent highs.

Technical analyst Riyank Arora from Mehta Equities Ltd. recommended buying IDFC First Bank and Aurobindo Pharma on November 3. For IDFC First Bank, he suggested buying at ₹81.77 with a target of ₹87/₹90 and a stop-loss at ₹78. The stock shows strong accumulation after consolidation and could break out above ₹82.

Aurobindo Pharma is also showing strong momentum within the pharma sector. Trading above key moving averages with rising investor interest, it has potential for further upside. Arora advised buying at ₹1,138.90 with targets of ₹1,200/₹1,240 and a stop-loss at ₹1,100.

The Bank Nifty's daily RSI cooled to around 62, suggesting consolidation might be underway. The MACD histogram has flattened, indicating reduced directional strength. Immediate support is near 57,500-57,200, with deeper support around 57,000. Resistance remains strong between 58,100-58,200.

The Indian stock market's current volatility is influenced by several factors including global economic conditions and corporate earnings reports. Investors should remain cautious while considering these insights for informed decision-making in the market.