On October 31, 2024, the Indian stock markets closed on a bearish note, marking the last trading session of the Samvat 2080 calendar year. Both the BSE Sensex and NSE Nifty 50 experienced losses, ending their second consecutive day in the red. The downturn was primarily led by the underperformance of IT stocks, with heavyweight companies such as HCL Tech, Tech Mahindra, TCS, and Infosys facing significant declines. This sectoral pullback reflected a broad market sentiment, as most other indices also saw losses, apart from a few notable exceptions. The Sensex dropped by 553.12 points (0.69%) to settle at 79,389.06, while the Nifty 50 fell by 135.50 points (0.56%) to end at 24,205.35. Despite these recent dips, Samvat 2080 closed with positive annual gains; the Sensex posted a robust 22.31% increase, while the Nifty 50 achieved an even more impressive 26.40% growth, demonstrating a strong year overall for Indian equities.
The market’s closing session for Samvat 2080 saw 34 of the 50 constituent stocks in the Nifty 50 ending in negative territory. Major contributors to the decline included IT giants, with HCL Tech, Tech Mahindra, TCS, and Infosys leading losses, as well as Asian Paints. These stocks recorded drops extending to 3.61%, reflecting a challenging day for the IT sector. Conversely, the day wasn’t completely bleak, as 16 stocks managed to end in the green. Gains were notably led by Cipla, Larsen & Toubro (L&T), Dr. Reddy’s Labs, ONGC, and Mahindra & Mahindra, with their stock prices rising by up to 9.50% over the session. In particular, Cipla and L&T performed well, providing some support to the indices even amidst the downturn.
Small-cap stocks emerged as the outperformers within the broader market indices. The Nifty Smallcap 100 index ended the day up by 1.15%, demonstrating resilience despite the prevailing negative sentiment in large caps. This upward trend in small-cap stocks signals ongoing investor interest in high-growth potential sectors within the market, which often include smaller or emerging companies. Similarly, the Nifty Midcap index witnessed a modest decline of 0.40%, outperforming the larger indices in relative terms.
The worst-hit sector of the day was IT, as the Nifty IT index fell by 3.03%. Persistent Systems and Mphasis were among the top losers in the sector, further dragging down the performance of the index. This downturn in IT stocks could be attributed to profit-booking after a strong performance throughout much of Samvat 2080, as well as concerns over international market conditions affecting the revenue of Indian IT firms, which heavily rely on foreign business, particularly from the United States. Sectoral weakness was also observed in Nifty Bank, which dipped by 0.64%, as well as several other sectoral indices. Despite the generally negative trend, a few sectors showed resilience. The Nifty Media, Pharma, and Healthcare indices closed in the green, each gaining over 1%. These sectors have generally performed well as defensive investments, often attracting investors during times of market volatility due to their essential nature and relatively steady demand.
The day’s trading session was marked by considerable volatility. The Nifty index attempted to break through resistance levels but faced selling pressure, particularly around the 50-day Exponential Moving Average (EMA) on the hourly chart. This technical resistance led to a pullback toward the 24,200 level, a psychologically important support level for the index. Analysts suggest that as long as the Nifty remains below the 24,500 mark, the sentiment is likely to stay weak, with any upward move toward this level expected to encounter selling pressure. On the downside, the index is likely to find support around the 24,000 level, while immediate resistance lies at 24,500, with a secondary resistance expected near 24,750.
An additional factor weighing on investor sentiment was the rupee’s performance. On the day, the Indian rupee fell to a record low of 84.1 against the US dollar, further dampening market confidence. A weaker rupee often increases import costs and can contribute to inflationary pressures, impacting sectors reliant on imports, such as electronics and manufacturing. The pressure on the rupee is largely attributed to a strong dollar, which has been gaining momentum due to recent data indicating resilient growth in the U.S. economy.
On the economic front, upcoming data releases and government spending plans are expected to be major factors shaping market strategy for Samvat 2081. Core sector data, which gives insight into the performance of major industries, and announcements regarding government spending, especially in infrastructure and other growth-oriented sectors, are being closely monitored. These indicators are expected to play a role in determining investor sentiment as the new trading year unfolds.
The market now looks forward to the Muhurat trading session on November 1, 2024, an auspicious one-hour session marking the start of Samvat 2081. Held annually on Diwali, the Muhurat session allows investors to begin the new trading year on a positive note. While traditionally viewed as a symbolic event, Muhurat trading often sees selective buying in sectors and stocks favored by long-term investors, including blue-chip companies, as well as companies with strong growth potential. Analysts are suggesting that investors focus on stocks with strong fundamentals and those that are likely to benefit from government initiatives, especially given the current volatility in the market. Sectors like infrastructure, pharmaceuticals, and banking are likely to be popular picks during Muhurat trading, with investors looking to balance between growth and defensive sectors.
Additionally, the market witnessed significant developments outside the benchmark indices. HDB Financial Services, a subsidiary of HDFC Bank, filed for a Rs 12,500 crore IPO, signaling the strength of India’s financial sector. Furthermore, Brigade Hotel Ventures submitted draft papers to SEBI for a Rs 900 crore IPO, while Waaree Energies enjoyed an 81% surge from its IPO price, reflecting sustained investor interest in new public offerings. The IPO market remains robust, buoyed by investor demand and favorable valuations, providing companies an opportune window to raise capital.
While Samvat 2080 ended on a bearish note, the year has overall been a positive one for Indian equities, marked by significant gains across major indices. The year has witnessed strong investor participation, with retail and foreign investors actively contributing to the rally. The performance of Samvat 2080, with gains of over 20% for both the Sensex and Nifty 50, underscores the resilience and growth potential of the Indian markets. As investors turn their attention to Samvat 2081, market dynamics will likely be shaped by a combination of domestic factors, including corporate earnings, inflation data, and government policy, as well as international influences like interest rate trends and global economic conditions.
In summary, the Indian stock market wrapped up Samvat 2080 on a mixed note, with IT stocks dragging the indices down on the final day while select sectors like Media, Pharma, and Healthcare displayed resilience. Small-cap stocks stood out as the day’s best performers, reflecting investor optimism for high-growth potential segments within the broader market. The upcoming Muhurat trading session provides an opportunity for investors to position themselves for the new year, focusing on sectors poised for growth amid ongoing economic challenges and uncertainties.
