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Gift Nifty Weekly Review: As the new week begins, domestic benchmark indices are poised for a gap-down opening due to escalating geopolitical tensions between Israel and Palestine. This conflict has had far-reaching effects, including a surge in crude oil prices and a flight to safe-haven assets such as bonds and the US dollar. While most Asian markets observed a public holiday, US markets opened with gains in overnight trading. Back in India, investors are eagerly anticipating the upcoming Q2 earnings season.
Gift Nifty Outlook
Ashwin Ramani, a Derivatives & Technical Analyst at SAMCO Securities, suggests that Nifty has shown consecutive higher closes on the daily chart, indicating a trend reversal. It has managed to close above the 50-day Exponential Moving Average (DEMA) of 19,559, touching the 38.2 percent Fibonacci retracement level of 19,673 (drawn from the high of 20,222). The support for Nifty now shifts to 19,600 following a strong closing.
Gift Nifty Bank Outlook
For Nifty Bank, the key support zone lies at 44,000. There is potential for a rally towards the 50-day Simple Moving Average (SMA) or levels of 44,800-45,000. However, if Nifty Bank falls below the crucial 44,000 mark, it may put the uptrend in a vulnerable position, warns Athawale, Vice President for technical research at Kotak Securities.
GIFT Nifty Signals a Negative Start
Nifty futures on the NSE International Exchange traded 129 points, or 0.65 percent, lower at 19,641. This suggests a negative start for the domestic market on Monday.
Asian Markets in Holiday Mode
The majority of Asian markets remained closed due to public holidays. However, the few that were open experienced declines, primarily driven by concerns over the Middle East conflict involving Hamas. The MSCI’s broadest index of Asia-Pacific shares outside Japan managed a modest 0.18 percent increase. Specific market movements included Japan’s Nikkei falling 0.10 percent, Australia’s ASX 200 rising by 0.51 percent, New Zealand’s DJ dropping by 0.74 percent, China’s Shanghai declining 0.54 percent, Hong Kong’s Hang Seng surging 1.88 percent, and South Korea’s Kospi edging up by 0.14 percent.
Oil Prices Surge Amid Middle-East Violence
Oil prices saw a significant jump of more than $4 per barrel in early Asian trade on Monday. This surge is attributed to dramatic military clashes between Israeli and Hamas forces over the weekend, which deepened political uncertainty across the Middle East. Brent crude rose by $4.18, or 4.94 percent, to $88.76 per barrel, while US West Texas Intermediate crude stood at $87.02 per barrel, up $4.23, or 5.11 percent.
Dollar Gains on Flight to Safety
The safe-haven US dollar and Japanese yen strengthened on Monday as violence in the Middle East spooked global markets. Additionally, a strong US jobs report further bolstered the greenback. The dollar index recorded a 0.11 percent increase, reaching 106.21. The Japanese yen strengthened to 149.19 per dollar. Meanwhile, the euro depreciated by 0.2 percent to $1.0565, and sterling slipped by 0.1 percent to $1.2218 against the dollar.
Wall Street Records Higher Closes
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Following the release of a robust US jobs report on Friday, Wall Street experienced a significant rally. The data indicated a strong economy with moderating inflation, alleviating concerns about higher interest rates that had led to a surge in bond yields. The Dow Jones Industrial Average gained 288.01 points, or 0.87 percent, closing at 33,407.58. The S&P 500 also saw substantial gains, rising by 50.31 points, or 1.18 percent, to 4,308.5. The Nasdaq Composite added 211.51 points, or 1.6 percent, reaching 13,431.34.
Stocks in F&O Ban List
The National Stock Exchange (NSE) has placed four stocks – Indiabulls Housing Finance, Delta Corp, Punjab National Bank, and Manappuram Finance – under the F&O segment ban for Monday, October 7th. This action is taken when derivative contracts exceed 95 percent of the market-wide position limit.
FPIs Sell Shares Worth Rs 1,864 Crore
Provisional data from the National Stock Exchange (NSE) indicates that Foreign Portfolio Investors (FPIs) were net sellers of domestic stocks, amounting to Rs 90.29 crore on Friday. In contrast, domestic institutional investors (DIIs) turned net buyers, purchasing Indian equities worth Rs 783.25 crore. Notably, overseas investors withdrew a total of Rs 7,998 crore from Indian equities in the first week of October 2023.
Rupee Slips 2 Paise Against Dollar
The Indian rupee weakened by 2 paise against the US dollar on Friday, settling at 83.27. This decline followed the Reserve Bank’s decision to maintain the repo rate unchanged in its fourth consecutive monetary policy review. Factors such as unabated foreign fund outflows and the strength of the US dollar were responsible for the local unit’s depreciation, as reported by forex traders.
Please note that all information provided is based on available sources and market conditions, and it may be subject to change.
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