Indices poised for rebound after 6-day fall

GIFT Nifty:

The GIFT Nifty October futures contract is currently up 119 points, indicating a potential relief rally for the Nifty 50 following a period of correction over the past six trading sessions.

Institutional Flows:

Foreign portfolio investors (FPIs) sold shares worth Rs 8,293.41 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 13,245.12 crore in the Indian equity market on 7 October 2024, provisional data showed.

FPIs have sold shares worth over Rs 39012.98 crore in October 2024 (so far). They bought shares worth 15,423.32 crore in September 2024.

Global Markets:

Most Asian shares tumbled on Tuesday. However, Chinese stocks surged as trading resumed after a week-long break, buoyed by recent stimulus measures from Beijing. Officials are scheduled to provide further details on these measures later today.

In contrast, other Asian indices followed Wall Street's downward trend. U.S. stocks fell sharply on Monday as investors anticipated a smaller rate cut from the Federal Reserve due to a stronger-than-expected U.S. jobs report.

The major U.S. indexes suffered significant losses on Monday. The Dow Jones Industrial Average fell 0.94%, the S&P 500 dropped 0.96%, and the NASDAQ Composite lost 1.18%.

Fears of an escalating Middle East conflict also dampened risk appetite. Meanwhile, the impending landfall of Hurricane Milton, following on the heels of Hurricane Helene, added further anxiety.

US tech stocks witnessed a sharp decline. Google's parent company, Alphabet Inc., faced pressure after being ordered to restructure its Android app store. Additionally, negative analyst comments on Amazon and Apple triggered selling in these tech giants.

The release of the minutes from the September Federal Reserve meeting, scheduled for Wednesday, will be closely monitored. These minutes will offer insights into the Fed's future rate cut strategy. Thursday's consumer price index data is another key event. Investors will be looking for signs of persistent inflation, which could influence the Fed's monetary policy decisions.

Domestic Market:

The key equity benchmarks extended their losing streak for the sixth consecutive session on Monday, as concerns over FIIs outflows and global geopolitical tensions weighed on investor sentiment. The broader market took a significant beating, with midcap and smallcap indices underperforming sharply. The Q2 earnings season is also approaching, with IT majors set to report results this week. Meanwhile, the RBI's monetary policy meeting began today, further dampening investor sentiment. The Nifty closed below the 24,800 level after hitting the days high of 25,143 in early trade. IT shares bucked the broader sell off. PSU banks, energy and metal shares tumbled.

In the barometer index, the S&P BSE Sensex dropped 638.45 points or 0.78% to 81,050. The Nifty 50 index slipped 218.85 points or 0.87% to 24,795.75. The 50-unit index has corrected 5.42% in five consecutive sessions.

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