NIFTY OUTLOOK FOR 1 OCT 2024

Market Overview: On September 30, Indian equity indices ended on a weak note, with the Nifty closing below 25,850. The Sensex was down 1,272 points (1.49%) at 84,299, while the Nifty declined 368 points (1.41%) to close at 25,810. Market breadth remained negative as 2,107 shares declined, 1,757 shares advanced, and 148 shares remained unchanged.

Sectoral Performance:

• Top Gainers: Metal and Media sectors ended higher, with a 1% rise each.
• Top Losers: Other sectors such as Auto, Banking, IT, Telecom, Pharma, and Realty witnessed a decline of 1-2%.

Key Stock Movers:

• Top Gainers: JSW Steel, Hindalco Industries, NTPC, Tata Steel, and Britannia Industries.
• Top Losers: Hero MotoCorp, Trent, Axis Bank, Reliance Industries, and Bharat Electronics.

Broader Market Performance:

• BSE MidCap Index: Ended with marginal losses.
• BSE SmallCap Index: Ended flat.

Currency Market: The Indian Rupee weakened, driven by a combination of weak domestic equity markets and a surge in crude oil prices. The US Dollar softened due to weaker-than-expected core PCE price index and personal income data from the US, raising hopes for a potential rate cut by the Federal Reserve. However, Dollar demand from importers and month-end profit booking from oil marketing companies (OMCs) pressured the Rupee.

• USDINR Outlook: Expected to trade between Rs 83.60 and Rs 84 due to continued domestic market weakness, rising crude oil prices, and geopolitical tensions in the Middle East. However, the weakness in the US Dollar could support the Rupee.

Retail Investor Sentiment: Retail investors turned net sellers in September 2024, ending a five-month buying streak. They offloaded shares worth Rs 7,500 crore, the largest sell-off since March 2024. This contrasts with the activities of both foreign and domestic institutional investors, who continued to pour money into Indian equities:

• Domestic Institutional Investors (DIIs): Purchased shares worth Rs 17,421 crore in September.
• Foreign Institutional Investors (FIIs): Bought shares worth Rs 55,855 crore during the same period.

Analysts attribute the sell-off by retail investors to profit-booking at higher levels and the attraction of IPOs. Many investors have shifted their focus to newly launched public issues, leading to a sell-off in the secondary market, even in stocks that saw significant listing gains.

Market Trends in September:

• Sensex Performance: +3.9% for the month.
• Nifty Performance: +3.7% for the month.
• MidCap Index: +0.9% for the month.
• SmallCap Index: +1.91% for the month.

Year-to-Date Performance:

• Sensex: +18.5%
• Nifty: +20%
• MidCap Index: +34%
• SmallCap Index: +34%

Outlook: Investors will closely monitor India’s fiscal deficit and current account deficit data for further market cues. Additionally, the US economic reports, such as the ISM Manufacturing PMI and non-farm payrolls, are likely to influence the markets in the upcoming week. Geopolitical tensions in the Middle East and fluctuations in crude oil prices may further add volatility to the Indian equity market.