Market Commentary - Mid-Session
Sensex nosedives 1,606 pts; European mkt decline As on : 03-Oct-24  13:38

The headline equity benchmarks traded with deep cuts in afternoon trade amid mixed cues from global markets and fears of full fledged war between Iran and Israel. The fall was also triggered by SEBI's new F&O rules. The Nifty traded near the 25,300 level. All the sectoral indices on NSE were in the red with realty, auto and oil & gas shares loosing the most. Trading was volatile due to weekly F&O series expiry today.

At 13:30 IST, the barometer index, the S&P BSE Sensex tumbled 1,606.44 points or 1.91% to 82,658.58. The Nifty 50 index dropped 495.85 points or 1.92% to 25,301.05.

In the broader market, the S&P BSE Mid-Cap index slipped 2.12% and the S&P BSE Small-Cap index declined 1.69%.

The market breadth was weak. On the BSE, 1,045 shares rose and 2,857 shares fell. A total of 104 shares were unchanged.

SEBI's new F&O rules:

The Securities and Exchange Board of India's (SEBI) introduced a six-step plan to curtail retail participation in speculative index derivatives. This could result in a significant decline in trading volumes. New regulations require traders to maintain higher margins, potentially hindering their ability to take on larger leveraged positions.

Moreover, the reduction of weekly options expiries to one per exchange could lead to decreased revenues for exchanges and brokers. This change means that each exchange will only offer weekly contracts for one benchmark index instead of the current two to four. These measures are designed to reduce excessive speculation in the futures and options (F&O) segment, where retail investors often find themselves on the losing end of trades.

Gainers & Losers:

JSW Steel (up 1%), Dr Reddy's Laboratories (up 0.24%), Sun Pharmaceutical Industries (up 0.20%) and Tata Steel (up 0.01%) were major Nifty gainers.

Bharat Petroleum Corporation (down 4.98%), Larsen & Toubro (down 3.89%), Shriram Finance (down 3.86%) Asian Paints (down 3.78%) and Bajaj Finserv (down 3.57%) and were major Nifty losers.

Stocks in Spotlight:

Hero MotoCorp slipped 1.32%. The two-wheeler major's total motorcycle and scooter sales jumped 18.74% to 637,050 units in September 2024 as compared with sales of 536,499 units recorded in September 2023.

Dabur India dropped 6.35% after the company expects to post a mid-single-digit decline in consolidated revenue for the September quarter (Q2 FY25), primarily attributed to heavy rains and floods affecting various regions of the country.

Maruti Suzuki India slipped 2.93%. The company has recorded total sales increased 1.87% to 1,84,727 units in September 2024 as against 1,81,343 units sold in September 2023.

Adani Ports and Special Economic Zone (APSEZ) slipped 3.50%. The company said that it has handled a total cargo volume of 37.5 million metric tonnes (MMT) in September 2024, which is higher by 14% on YoY basis.

NMDC slipped 2.71%. The state-owned miner's iron ore production increased by 1.33% to 3.04 million tonnes (MT) in September 2024 as against 3 MT produced in September 2023.

ITD Cementation India soared 18.92% after the firm secured a new contract worth Rs 1,937 for constructing a multi-storied commercial building in Uttar Pradesh.

Global Markets:

European markets mostly declined while Asian stock traded mixed on Thursday, mirroring a cautious sentiment across global markets amid escalating tensions in the Middle East.

Markets in China and South Korea remained closed for a holiday. Taiwan markets were shut for a second day as Typhoon Krathon brings torrential rain on the island.

Geopolitical tensions in the Middle East have spiked following Iran's missile attack on Israel on October 1. Israel's subsequent ground incursions into Lebanon targeting Hezbollah, an Iran-backed militia group, have exacerbated concerns about potential oil supply disruptions and increased uncertainty in global financial markets.

In the United States, stock markets closed with modest gains on Wednesday. The tech-heavy Nasdaq Composite rose slightly by 0.08%, while the S&P 500 and Dow Jones Industrial Average inched up by 0.01% and 0.09%, respectively. Investor caution persisted, however, due to Middle East tensions and the anticipation of additional US labor data.

Key US tech stocks witnessed mixed performance. Nvidia gained 1.6%, while Tesla experienced a 3.5% decline. Humana Inc. and Nike faced significant losses, with drops of 11.8% and nearly 7%, respectively.

The ADP National Employment Report indicated that US private payrolls grew more than expected in September, adding 143,000 jobs. This surpassed economists' forecasts and highlighted the strength of the US labor market despite broader economic uncertainties.

The US job market's resilience was further underscored by the unexpected increase in job openings in August. The Job Openings and Labor Turnover Survey (JOLTS) revealed a rebound of 329,000 job openings, exceeding analysts' expectations. While hiring declined slightly, layoffs decreased.

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