Share Market Today: Sebi Bd meet outcome, Israel War, Powell on rate cuts

Share market today, Oct 1, 2024: The GIFT Nifty indicates a flat to positive start for the benchmark indices, Sensex and Nifty50, this Tuesday. 

At 7:20 AM, GIFT Nifty futures were trading approximately 8 points higher at 25,998 against Nifty futures close, suggesting a muted opening.

On the previous trading day, September 30, both the BSE Sensex and NSE Nifty 50 experienced declines of over 1 per cent, primarily due to significant profit booking. The Sensex fell by 1,272.07 points (1.49 per cent) to close at 84,299.78, hitting an intra-day low of 84,257.14. Similarly, the Nifty 50 decreased by 368.10 points (1.41 per cent) to finish at 25,810.85.

 

Wall Street recap

On Monday, the S&P 500 reached a record high, rebounding after a brief dip, as Federal Reserve Chair Jerome Powell signalled a cautious approach regarding further interest rate cuts. 

The S&P 500 and Nasdaq gained 0.42 per cent and 0.38 per cent, respectively, while the Dow Jones increased by 0.04 per cent. 

Powell, at a National Association for Business Economics conference in Nashville, Tennessee, stressed upon the Fed's preference for gradual quarter-percentage-point cuts, citing sustained economic growth and consumer spending as key factors.

Asia-Pacific markets 

Asian markets showed mixed results on Tuesday, reacting to Powell's remarks. Japan’s Nikkei 225 rebounded 1.07 per cent after a sharp 4.8 per cent drop on Monday, while the Topix rose 0.88 per cent. Conversely, Australia’s S&P/ASX 200 fell by 0.47 per cent, pulling back from an all-time high. 

On the data front, Japanese business sentiment remained steady, with large manufacturers reporting a +13 rating, unchanged from the previous quarter. The unemployment rate in Japan improved to 2.5 per cent, down from 2.7 per cent in July.

Several Asian markets, including South Korea, Hong Kong, and mainland China, are closed for a public holiday, with China observing the Golden Week for the remainder of the week.

The War remains 

Geopolitical tensions are escalating as Israeli airstrikes target Hezbollah positions in southern Lebanon. The Israeli military has commenced a "limited, localised" operation, raising concerns about regional stability, according to several reports.

Sebi meeting outcome

The Securities and Exchange Board of India (Sebi) has approved the introduction of a new asset class aimed at offering more flexibility to fund managers and targeting risk-oriented investors. The board also endorsed the liberalised Mutual Funds Lite (MF Lite) framework, focusing on passively managed schemes. Discussions about employee dissatisfaction and allegations against Chairperson Madhabi Puri Buch were noted, but no resolutions were announced. READ MORE

Other triggers

Back home, for the first time in 42 months, the output of India’s eight key infrastructure sectors saw a 1.8 per cent year-on-year (Y-o-Y) contraction in August, data released by the Department for Promotion of Industry and Internal Trade (DPIIT) showed.

Investors will be closely monitoring India’s manufacturing PMI for September, auto sales for September, along with the UK and US manufacturing data. August job openings and construction spending in the US will also be eyed.

Also Read: Fiscal deficit in April-August at 27% of full-year target, Govt data reveals

NSE and BSE charges revision 

Beginning October 1, the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) will implement new transaction charges in response to a Securities and Exchange Board of India (Sebi) directive aimed at eliminating the slab-wise charge structure for market infrastructure institutions (MIIs). For equity options, the NSE will charge Rs 3,503 per crore of premium value for each side of a transaction. Meanwhile, the BSE will adjust its charges for Sensex and Bankex options contracts to Rs 3,250 per crore of premium turnover.

STT hike 

In addition to these transaction changes, Finance Minister Nirmala Sitharaman had announced an increase in the Securities Transaction Tax (STT) for futures and options trading, effective the same day. The STT for futures trading will rise to 0.02 per cent, up from 0.0125 per cent, while options trading will see an increase to 0.1 per cent. 

IPO Watch 

In the IPO space, NeoPolitan Pizza and Foods Limited, Paramount Dye Tec Limited, and Subam Papers Limited will enter Day 2 of their subscription today. Meanwhile, today will be the last day for subscriptions for HVAX Technologies IPO and  Saj Hotels IPO.

Market activity snapshot

On September 30, Foreign Institutional Investors (FIIs) sold shares worth Rs 9,791.93 crore, while Domestic Institutional Investors (DIIs) purchased shares worth Rs 6,645.80 crore.

Commodity insights

On Monday, US crude oil prices saw its third consecutive monthly loss due to rising supplies and weak demand in China. West Texas Intermediate crude is at $68.17 per barrel, while Brent is at $71.77 per barrel. Meanwhile, Gold prices eased slightly after a major rally, with spot gold at $2,626.95 per ounce and US gold futures at $2,649.2.

Here's how analysts are assessing today's (October 1) trading session:

Ajit Mishra, senior vice president of research at Religare Broking Ltd.

Nifty’s three-week upward streak had pushed the index into overbought territory, leading participants to trim their positions amid mixed global signals. The broad-based decline in heavyweight stocks put the bulls on the back foot, potentially paving the way for some consolidation. The next crucial support for Nifty is around the 25,560 level, near the short-term moving average i.e. 20 DEMA. If a rebound occurs, the 26,000-26,250 zone could pose resistance. Traders are advised to adopt a stock-specific strategy and maintain positions on both sides of the market.

Nagaraj Shetti, senior technical research analyst at HDFC Securities

The market action is signalling a short term top reversal action for the Nifty and expect some more weakness in the coming sessions. Bullish higher tops and bottoms are intact on Nifty as per daily time frame chart. Present weakness could be in line with the new higher bottom of the sequence. We expect Nifty to find support around 25,500-25,400 and the market is likely to bounce back from the lows. Immediate resistance to be watched at 26,000 levels.

Tejas Shah, Technical Research, JM Financial & BlinkX

The index should now find support around the next major support zone of 25,650-700 and there is a strong possibility that the bulls will put in a fight here. Support for Nifty is now seen at 25,650-700 and 25,450-500. On the higher side, immediate psychological resistance is at 26,000 levels and the next resistance zone is at 26,125-150 levels. Overall, it would be interesting to see whether or not follow up selling occurs in today’s trading session.