Market Today: Q2 nos., China lowers lending rates, S&P 500 & Dow at record

China lowered its key benchmark lending rates by 25 basis points in the monthly fixing. The People's Bank of China (PBOC) reduced the 1-year loan prime rate (LPR) to 3.1% and the 5-year LPR to 3.6%

Stock Market Today, October 21, 2024: Indian benchmarks Nifty50 and Sensex are likely to open on a subdued note today.

At 6:30 AM, GIFT Nifty Futures was down about 10 points, trading at 24,939, suggesting a weaker start for the markets.

Domestic cues
 

Investors will react to recent earnings from major companies, including HDFC Bank, Kotak Mahindra Bank, Tata Consumer Products, and Tech Mahindra. HDFC Bank reported a net profit of Rs 16,820 crore for Q2FY25, reflecting a year-on-year growth of 5.3 per cent. This marks a sequential increase of 4 per cent from Rs 16,175 crore in Q1FY25. Meanwhile, Kotak Mahindra Bank saw a consolidated profit of Rs 5,044.05 crore for the same quarter, up 13 per cent year-on-year. 

 

Additionally, investors will be watching for earnings reports from UltraTech Cement, Bajaj Housing Finance, Union Bank of India, and 14 other companies.
 

Also Read: 'UBS underweight in Indian equities vs other EMs': Sunil Tirumalai

That apart, the National Stock Exchange’s (NSE) revisions to the lot sizes for its index derivatives contracts will also act as a trigger. According to a circular issued on October 18, the lot size for the Nifty 50 derivatives contract will increase from 25 to 75. Similarly, the Nifty Bank derivatives contract lot size will rise from 15 to 30. Additionally, the lot size for the Nifty Financial Services derivatives contract will be adjusted from 25 to 56, while the Nifty Next 50 will see an increase from 10 to 25. 

These changes will take effect on November 20, following a directive from the Securities and Exchange Board of India, which mandates that derivatives contracts maintain a minimum value of Rs 15 lakh per lot.

Also Read: BSE, NSE to conduct one-hour Diwali 'Muhurat Trading' on November 1

Asia-Pacific markets 
 

In the Asia-Pacific region, markets were trading higher as traders assessed China's loan prime rate figures. China lowered its key benchmark lending rates by 25 basis points in the monthly fixing. The People’s Bank of China (PBOC) reduced the one-year loan prime rate (LPR) to 3.1 per cent and the five-year LPR to 3.6 per cent. The one-year LPR affects corporate and most household loans, while the five-year LPR serves as a benchmark for mortgage rates.

Consequently, Japan's Nikkei 225 rose 0.16 per cent  while the broader Topix was up marginally. South Korea's Kospi rose 0.6 per cent and Australia's S&P/ASX 200 jumped 0.7 per cent.

Wall Street update
 

US stock futures were slightly higher on Sunday night. Dow futures rose 44 points (0.1 per cent), with S&P 500 and Nasdaq 100 futures increasing by 0.13 per cent and 0.16 per cent, respectively. 

Both the S&P 500 and Dow reached all-time highs on Friday, marking a sixth consecutive week of gains. Consequently, the S&P 500 settled 0.85 per cent higher, while the Dow closed 0.96 per cent higher. The Nasdaq Composite soared 0.80 per cent.

Weekly cues
 

This week, the market will be closely monitoring several key economic indicators. Among the highlights are Korea's September Producer Price Index (PPI) scheduled for October 22 and the Reserve Bank of India's Monetary Policy Committee (MPC) Minutes on October 23. On October 24, the focus will shift to Korea's advance GDP growth rate for Q3, along with Japan's Jibun Bank Manufacturing PMI flash, Services PMI flash, and Composite PMI flash. HSBC India's October Composite PMI Flash, Services PMI Flash, and Manufacturing PMI Flash will also be released on the same day, as will Britain's October Composite, Services, and Manufacturing PMI flashes. Additionally, the U.S. will report its October Composite, Services, and Manufacturing PMI flashes, along with initial jobless claims for the week ending October 19.

IPO corner
 

Waaree Energies Limited IPO (Mainline), Deepak Builders & Engineers India Limited IPO (Mainline), and Premium Plast Limited IPO (SME) will open for bidding today. Meanwhile, Freshara Agro Exports Limited (SME) will conclude its subscription today.

Gold rates
 

Gold surged past the $2,700-per-ounce mark on Friday, driven by rising tensions in the Middle East, uncertainties surrounding US elections, and relaxed monetary policy expectations. Spot gold rose nearly 1 per cent to $2,724.84 per ounce, with US gold futures closing 0.4 per cent higher at $2,740.10.

Oil prices  
 

Oil futures declined on Friday, witnessing a weekly drop of over 7 per cent. Brent crude futures fell $1.39 (1.87 per cent), closing at $73.06 per barrel, while US West Texas Intermediate crude settled at $69.22 per barrel, down $1.45 (2.05 per cent).

FII and DII activity

On October 18, foreign institutional investors (FIIs) sold shares worth Rs 5,485.70 crore, while domestic institutional investors (DIIs) purchased shares worth Rs 5,214.83 crore.

Market recap (October 18)
 

After a weak start, Indian stock markets recovered, fuelled by a rally in bank and financial shares. The BSE Sensex closed at 81,224.75, up 218 points (0.27 per cent), while Nifty50 ended at 24,854.05, gaining 104.16 points (0.42 per cent).

Here's how analysts are assessing today's (October 21) trading session:

Ravi Nathani, Independent Analyst
 

The Nifty 50 Index appears to be approaching a bottom formation in the near term, signalling that a further downside move seems unlikely. The critical support level is positioned at 24,566, which is expected to act as a strong floor for the index. This level should be viewed as a pivotal point, and traders can consider buying on dips with a strict stop-loss placed at 24,566 on a closing basis. In terms of resistance, the index is likely to face some short-term resistance around 25,225. A close above this level could trigger a wave of bullish momentum, with the next resistances placed at 25,425, 25,625, and 29,925. Traders should focus on accumulating positions in the index and its heavyweight stocks at dips, as a bounce from the support level may lead to significant gains. This strategy is well-suited for both short-term and medium-term traders who seek to capitalise on potential upward moves.

Amol Athawale, VP- Technical Research, Kotak Securities
 

The larger market texture is still on the weak side but fresh selloff is possible only after dismissal of 24650/80800. Below the same, the market could slip till 24500-24450/80500-80300. On the flip side, 24900/81500 could be the immediate resistance zone for the bulls. Post 24900/81500 the pullback momentum is likely to continue till 25000-25050/82000-82200.

Rupak De, Senior Technical Analyst, LKP Securities
 

The Nifty has moved up sharply after forming a panic bottom around 24,570, failing to sustain below 24,700. On the hourly chart, a positive divergence is visible on the RSI (14), indicating a shift toward positive price momentum. Immediate resistance is seen at 24,900, which previously acted as support. A decisive move above 24,900 could induce a short-term rally. The trend is likely to remain strong as long as the Nifty stays above 24,750.

Also Read: 'UBS underweight in Indian equities vs other EMs': Sunil Tirumalai