Stock market today: Sensex cracks 900 points, Nifty below 24,200

Indian stock market index dropped more than 1% on Thursday, following a strong rise in the previous session following Donald Trump’s victory in the US Elections 2024. The main indexes the Sensex and Nifty 50, fell more than 1% each on November 7 due to heavy selling across sectors. The Nifty 50 fell 0.023% to 24,183.05 points; it dropped 301 points in today’s session. At 10:At 35 am, the Bombay Stock Exchange’s Sensex declined 876.39 points or 1.09 percent to reach 79,501. The rupee strengthened against the dollar on Monday. The Nifty 50 dropped 302 points to 24,181.95 points. While the Sensex plunged 959 to a low of 79,419.34 during the day.

Nifty Smallcap 100 and Nifty Midcap 100 were down by 0.5 percent indicating the effect of the broader market. Nifty Metal, Nifty Pharma, Nifty Auto, Nifty IT, and Nifty Private Bank were the most affected sectors indices.

Out of all components of the Nifty 50, all but Apollo Hospitals and Tata Steel were in the reds during the trading session. The top NASDAQ 100 loser stocks as per the closing of Tuesday were Ultratech Cement, Adani Enterprises, Grasim Industries, Bajaj Finserv, and Hindalco Industries.

A day after two days of consolidated gains arising from Donald Trump’s victory in the US Presidential Election 2024. The Stock market in India has shocked the bulls today.

The monetary policy and interest rate by the US Federal Reserve has been moved forward and now investors await this on November 7.

The Indian stock market is now declining for the following five main reasons:

Booking of Profits

Following two days of a steep reverse rise, investors turned to profit booking in the market. Supported by advances across the board, the Nifty 50 index rose more than 2% in two days. Analysts advise a “sell on rise” approach, although they think the market’s underlying tone is still weak.

Trump Victory

Trump Policy Analysts believe that Donald Trump’s win has the potential to be more revolutionary than initially believed. Both positive and negative outcomes could result from these choices. His “America First” pro-business campaign has the potential to boost the US economy. However, if he follows through on his promises and slaps a 60% tariff on imports from China and a 10–20% tariff on imports from other nations. This would push inflation out of control and force the Fed to reconsider its current rate-cutting strategy. Global stock markets could be adversely affected by this.

Interest Rate Cut Pace

Trump’s inflationary measures are expected to slow the US Federal Reserve’s rate decreases, which could impact India’s monetary policy.

Donald Trump’s return to the U.S. presidency presents two main dangers that central bankers across the world are evaluating: slower global economic growth and quicker domestic inflation. It which would restrict the Federal Reserve’s capacity to cut interest rates. This might make it difficult for the emerging countries to turn their monetary policies around. It will eventually make the dollar more powerful. Policymakers have high belief that US Federal reserve will recommend at least a quarter-point cut today when it releases its policy decision.

Technicals

The Nifty 50 has declined after opening in the range of the previous session while it tried to extend higher from the prior day’s gain. The Nifty 50 can not overcome the critical resistance level of 24500.

Support for around 24,400 will be crucial throughout the day. This is due to the fact that any close below this threshold will result in a “bearish dark cloud cover. Participants will be keenly monitoring yesterday’s open of 24,309 if the slide gets worse. If the market closes below this level, it will trigger the more potent “bearish engulfing. 24,500 has been resistance for the past three days and will remain the key upside barrier moving forward, according to Akshay Chinchalkar, Head of Research at Axis Securities.

FII Selling

The Indian stock market is also being impacted by the ongoing flight of foreign capital. So far in November, Indian stocks valued at more than ₹11,500 crore have been sold by Foreign Institutional Investors (FII). According to stock exchange data, FII outflows totaling ₹1.14 lakh crore occurred in October.

According to provisional data available on the exchanges, FIIs net sold Indian shares worth ₹4,445.59 crore on Wednesday. While Domestic Institutional Investors (DIIs) net bought shares worth ₹4,889.33 crore.