Weekly market wrap: Nifty slips nearly 3 per cent; Metal and PSE indices drag

Indian equities in the week to October 25, 2024 fell relentlessly for five straight sessions amid persistent FII selling. During the week Nifty has been dragged lower by 2.71 per cent or 673.25 to below 24,200 levels, while the Sensex plummeted 2.24 per cent or 1,822.46 points to 79,402.29 levels.

Prashanth Tapse, Senior VP (Research), Mehta Equities on the market weakness said, "Markets continued its downward trajectory as broader selloff pulled down key benchmarks with Sensex ending below the crucial 80K mark. The dismal Q2 earnings so far has aggravated the investors’ woes while persistent FII selling continued to create havoc in the market. Despite the Chinese stimulus announcement, falling crude oil prices is an indication that major economies continue to feel the slowdown pinch."

Vinod Nair, Head of Research, Geojit Financial Services on the markets this week said, "A tough week for the market! Investor psychology turned a bit gloomy due to the ongoing geopolitical tensions and a kneejerk reaction from FIIs, which dragged the sentiment"

The sustained selling by FIIs and lack of triggers in the domestic market may impact the near-term sentiment in the market, he added.

The quarter results were impacted due to a tepid demand environment and margin pressure, which dragged FMCG, metal, auto, and realty the most. 

Top Nifty gainers and losers in the week to October 25, 2024

From the Nifty pack, HDFC Bank led the gains posting 3.66 per cent return during the week posts its Q2 quarterly numbers, followed by Tech Mahindra and Bajaj Auto which gained 1.69 per cent and 1.42 per cent, respectively.

Laggards from the pack included stocks like IndusInd Bank which plunged as much as 23 per cent, while Tata Consumer Products, BPCL and Adani Enterprises fell over 10 per cent each.

Other top losers from the basket were Hindalco,`M&M, L&T, ONG, HUL and Shriram Finance among others which fell between 7-10 per cent.

Top sectoral gainers and losers

Amid the drawdown on the headline indices, Nifty PSE and Nifty Metal indices fell the most by over 7 per cent each, while other laggards have been Nifty Realty index which fell nearly 7 per cent. Likewise, the Energy, Auto and PSU Bank indices, fell over 5 per cent. However, Nifty IT remained the most resilient, dropping just 0.16 per cent.

While IT remained relatively flat and contributed less to the overall losses in expectation of a pickup in BFSI spending and a favourable outlook in US spending, remarked Nair.

Meanwhile, broader markets also faced the wrath, with Nifty Smallcap index ending over 6 per cent lower.

Stock market outlook 

On the weekly chart, the Nifty formed a long bearish candle, which is not a positive sign. Tejas Shah, Technical Research, JM Financial & BlinkX said, t

echnically, the evidence continues to suggest that the markets are likely to remain under pressure in the near term

However, there is a possibility of a minor pull back rally or sideways consolidation in the next 1 or 2 days after a sharp fall which was witnessed in Friday’s trading session, he added. For the Nifty, the expert sees support placed at 24,100 and 24,000. On the higher side, immediate resistance for Nifty is at 24,450-500 levels and the next crucial resistance is at 24,700-750 level.

Nair meanwhile expects consolidation to continue in the short term; a reversal in trend will depend on a slowdown in FIIs selling intensity and the outcome of the US presidential election. The domestic macros are largely favouring the market with the unveiling of strong PMI data and reiterating economic growth forecast for FY25 by the RBI. A moderation in valuation, a pickup in earnings in H2FY25, and an expectation of an RBI rate cut in 2025 will provide support to the market.