Benchmark Nifty 50 closed October 2024 in deep red, nosediving by 6.2%, making it the worst monthly performance since the first wave of Covid-19 shook the world in March 2020. The 50-scrip benchmark even underperformed its counterpart Sensex which recorded a drop of 5.83% in the current month. There are a host of reasons to why Nifty could not shrug off bears of its back in October. Some of them are record selling by FIIs, sluggish corporate earnings, slower spending in H1FY25, and correction due to overvaluation.
On October 31, Nifty 50 ended at 24,205.35, down by 135.50 points or 0.56%. Overall, in the month, the benchmark nosedived by 1,605.50 points or 6.22%.
Among the 50 scrips traded under Nifty 50, Reliance Industries and Dr Reddy’s Lab declined steeply by 54.5% and 81.5% respectively. However, this is due to the stock price adjustment because Reliance carried the bonus issue and Dr Reddy’s carried the stock split earlier this week.
In percentage terms, it will be private sector lender IndusInd Bank that took the most beating from bears, plunging by 27% in 30 days. Other stocks to nosedive and drag the benchmark in 30 days are:
- Bajaj Auto: Down 19.5%,
- BPCL: Down 15.9%,
- Nestle India: Down 15.4%,
- Maruti Suzuki: Down 14.97%,
- Tata Consumer Products: Down 14.6%,
- Cipla: Down 14.3%,
- Hero MotoCorp: Down 14.06%,
- Tata Motors: Down 13.8%,
- Hindustan Unilever: Down 13.6%,
- Titan Company: Down 13.5%,
- M&M: Down 12.51%,
- ONGC: Down 12.08%,
- Coal India: Down 11.96%,
- SBI Life: Down 11.92%,
- Tata Steel: Down 11.62%,
- Bajaj Finserv: Down 11.20%,
- Shriram Finance: Down 10.94%.
These were the stocks that witnessed a double-digit decline in their price level. The rest of the stocks on Nifty dropped by single digits.
However, among the gains that managed to shrug off the wrath of bears on Nifty are – Wipro up 4.4%, Tech Mahindra UP 6.8%, ICICI Bank up 3.08%, HCL Tech up 2.4%, and Bharat Electronics ended October 2024 with upside of 1.2%.
That being said, the benchmark slipped sharply by 2,072 points from its all-time high of 26,277.35% which was recorded on September 27, 2024.
October 2024 becomes the worst monthly performance of 2024. Nifty 50 was in red only in January and May of 2024, but the downside was minimal by 0.03% and 0.52% respectively.
Notably, the October 2024 performance is also the worst since March 2020. The last time Nifty crashed above 6% was in March 2020 when the benchmark plunged by a breathtaking 23.25% due to the nationwide lockdown, standstill in many sectors, rising Covid cases, and gloomy economic trajectory at that time.
In October 2024, foreign institutional investors (FIIs) pulled out a record Rs 1,14, 445.89 crore from Indian stock market. The FIIs selloff is higher compared to the buying of RS 1,07,254.68 crore by domestic institutional investors (DIIs) in the month.
What’s ahead? Rupak De, Senior Technical Analyst, at LKP Securities said, The Nifty index remained volatile before closing on a negative note. On the hourly chart, it encountered resistance around the 21 EMA, leading to a pullback toward 24,200. Sentiment may continue to remain weak as long as Nifty stays below 24,500, with any rise toward this level likely facing selling pressure. On the downside, support is placed at 24,000, while resistance levels are seen at 24,500 and 24,750.
Further, Vinod Nair, Head of Research, Geojit Financial Services said, “The key benchmark indices traded with mild cuts while experiencing a broader sell-off in the technology sector due to weakness in the US IT companies, which has led the domestic IT companies to come under the shadow of underperformance. Investors remain cautious owing to weak domestic earnings for Q2. However, the market expects the momentum to reverse in H2 due to a rebound in core sector data and government spending, which are likely to influence the Samvat 2081 investment strategy.”
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Original news source Credit: www.goodreturns.in
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