It was another weak session for the Indian stock market in Monday’s trade, September 7, as escalating tensions in the Middle East kept crude oil prices elevated, while stronger-than-expected US job growth increased the odds of a Federal Reserve rate hike at its meeting next week, prompting investors to shy away from riskier assets.
Extending its losing streak to a fourth straight session, the Nifty 50 slipped another 0.57% to 23,779. The Sensex also remained under pressure, falling 0.5% to 76,132. During the intraday session, both indices slipped to their lowest levels since July 24.
The broader markets, however, remained mixed, with the Nifty Midcap 100 index surging 0.46%, while the Nifty Smallcap 100 index ended flat.
The losses were led by technology stocks after stronger-than-expected US jobs data boosted bets on a September interest rate hike by the Federal Reserve. Higher US interest rates could curb client spending, weighing on Indian IT firms that generate a significant share of their revenue from the United States.
Other sectoral indices, including realty, metal, PSU banks, cement, oil and gas, and FMCG, also ended with losses of more than 0.5%. On the other hand, the pharma pack was the sole gainer, rising 0.6%.
In the commodity market, Brent crude touched its highest level in six weeks, climbing towards $97 a barrel as the US and Tehran reportedly carried out their largest exchange of tanker attacks yet. Inflation concerns also pushed bond yields higher across Europe and Asia.
The US military denied that Iran had struck an uncrewed American military vessel in the Strait of Hormuz, which remains effectively closed, calling the claim a “total lie,” AP reported.
Asian markets remain mixed
Among major markets in Asia, Japan’s benchmark Nikkei 225 added 2.1% to finish at 66,399.84, while South Korea’s Kospi jumped 4.6% to 6,995.39.
Shares of Samsung Electronics soared 5.7%, while memory chipmaker SK Hynix surged 8.1%. Renesas Electronics Corp. added 3.1%, Rohm Co. rose 7.8%, and Tokyo Electron edged up 4.7%.
Hong Kong’s Hang Seng lost 0.9% to 25,413.12, while the Shanghai Composite gained less than 0.1% to 3,932.70.
Australia’s S&P/ASX 200 rose less than 0.1% to 9,010.90.
Nifty below 23,800: Can the index hold 23,700–23,750 support?
Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, said, “The Nifty 50 closed at 23,779.15, down 118.55 points or 0.50%, while the Sensex declined 382.62 points or 0.50% to 76,132.81. Bank Nifty settled at 57,088.30, lower by 281.35 points or 0.49%.”
“On the technical front, the Nifty ended below the 23,800 mark after failing to sustain above the 23,900 zone, reflecting continued weakness in near-term momentum. Immediate support is placed at 23,700–23,750; a decisive break below this zone could accelerate selling pressure and expose the index to the 23,500 level. On the upside, 23,900 remains the first resistance, followed by the crucial 24,000–24,100 zone, which the index needs to reclaim to improve the short-term technical outlook,” Radhakrishnan said.
Ajit Mishra, SVP – research, Religare Broking, said, “Technically, the Nifty has slipped back below the immediate support of 23,800, and the close indicates the possibility of a retest of the July swing low at the 23,600 level next, while the 23,900–24,050 region is expected to act as a stiff hurdle on any rebound. Given the current setup, we recommend continuing with a “sell on rise” approach in the Nifty while staying selective on the stock-specific front and focusing on strict risk management until the market stabilizes.”
Bank Nifty below key moving averages: Can bulls defend 57,000 support?
Vatsal Bhuva, Technical Analyst at LKP Securities, said that Nifty Bank formed a bearish candlestick on the daily chart and closed near its crucial support zone. The index has decisively slipped below its 20-DMA and 200-DMA, indicating a weak short-term technical structure.
However, Vatsal Bhuva noted that the index continues to hold above the key 57,000 level. A sustained move below 57,000 could trigger further downside towards 56,000. Conversely, holding above 57,000 may keep the index range-bound between 57,000 and 58,000. Immediate support is placed at 56,900–57,000, while resistance is seen at 57,900–58,000.
(more to come)