Wall Street Update

US stocks ended lower on Thursday, ahead of the highly anticipated monthly payrolls report. The Dow Jones dipped by 0.44 per cent, while the S&P 500 fell 0.17 per cent. The tech-heavy Nasdaq saw a slight decline of 0.04 per cent. 

Friday’s jobs report for September is critical for shaping the outlook on US interest rates, with economists predicting an addition of 140,000 jobs and an unemployment rate holding steady at 4.2 per cent. 

Additionally, official data revealed a marginal increase in unemployment claims, which rose to 225,000 due to disruptions from labour strikes and Hurricane Helene, adding further complexity to the labour market scenario.

Asian markets

Asia-Pacific markets traded mixed on Friday, reflecting losses on Wall Street and ongoing concerns over escalating tensions in the Middle East.

In Australia, the S&P/ASX 200 slipped over 1 per cent. Meanwhile, Japan’s Nikkei 225 fell 0.09 per cent, and the broad-based Topix rose marginally. South Korea’s Kospi also gained 0.49 per cent.

Oil prices fly

The surge in oil prices is adding to the uncertainty, with Brent crude leaping more than 5 per cent on Thursday, marking its biggest rise in a year. This also marked oil’s third consecutive session of gains as concerns grew that Israel might target Iran’s oil industry in retaliation for Tehran’s recent ballistic missile attack.

Gold steady

Gold prices remained steady on Thursday as rising safe-haven demand amid escalating tensions in the Middle East countered the pressure from a stronger dollar.

Spot gold was unchanged at $2,657.89 per ounce, having reached a record high of $2,685.42 last week. Meanwhile, US gold futures settled 0.4 per cent higher at $2,679.20.

Other triggers

On October 3, Foreign Institutional Investors (FIIs) sold shares worth Rs 15,243.27 crore, while Domestic Institutional Investors (DIIs) bought shares worth Rs 12,913.96 crore. 

Additionally, the markets regulator Securities Exchange Board of India (Sebi’s) directive to limit weekly expiries to one per exchange led BSE to announce the discontinuation of weekly contracts for both Sensex 50 and Bankex, effective in November. 

IPO activity 

Hyundai Motor India Ltd, the Indian subsidiary of South Korean automaker Hyundai, is likely to launch its highly anticipated initial public offering (IPO) for public subscription on October 14, according to reports. This IPO is expected to raise approximately Rs 25,000 crore, making it the largest in India since the LIC IPO, which was valued at Rs 21,000 crore.

According to the Draft Red Herring Prospectus (DRHP) submitted in June, Hyundai Motor India’s IPO will be an entirely Offer-for-Sale (OFS), involving the sale of 142,194,700 equity shares by its promoter, Hyundai Motor Company. There will be no new issue component in this offering. Reports suggest that the South Korean parent company aims to secure at least USD 3 billion (around Rs 25,000 crore) through this share sale.

Apart from that, Diffusion Engineers Limited (Mainline), Nexxus Petro Industries Limited (SME), Forge Auto International Limited (SME), Sahasra Electronics Solutions Limited (SME), and Divyadhan Recycling Industries Limited (SME) are set to debut on the bourses today.

On the other hand, Khyati Global Ventures Limited’s IPO (SME) will open for subscription and NeoPolitan Pizza and Foods Limited’s IPO (SME) will see its last day of subscription.

Previous session highlights 

On October 3, the BSE Sensex crashed 1,769 points, or 2 per cent, closing at 82,497, while the Nifty50 broke below the 25,300 mark, ending at 25,250, down 547 points or 2.12 per cent. The turmoil made investors poorer by approximately Rs 9.6 trillion. 

The Sensex hit an intraday low of 82,434, while the Nifty plummeted to 25,230.30 during the day. In the broader markets, the Nifty MidCap index dropped 2.2 per cent, and the Nifty SmallCap index skidded 1.9 per cent. The fear gauge, India VIX, soared 9.4 per cent as sentiments soured.

Here’s how analysts are assessing today’s (October 04) trading session:

Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd

Despite Thursday’s sharp fall, Nifty’s price action and the short-term technical outlook remains in favour of bulls provided it holds above its biggest support now seen at the psychological 25000 mark, while it faces hurdles at 26000 mark with the 200 DMA at 23117 mark.

Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas

On the daily charts we can observe that the Nifty has closed below the key 20 day moving average (25508) which is a sign of weakness. The daily momentum indicator has a negative crossover which is a sell signal. Thus, both price and momentum indicator suggest that the weakness is likely to continue. The initial target of 25500 has been achieved today and hence we revise it downwards to 24800. On the upside 25600 – 25550 is the immediate hurdle from a short term perspective.

Ajit Mishra, SVP, Research, Religare Broking Ltd

With Nifty breaching multiple supports—such as the 20-day exponential moving average (DEMA) around the 25,580 level and trendline support near 25,350—the market could face further downside. We are now looking at the 25,000-25,150 zone as the next support, while any rebound is likely to be capped in the 25,450-25,600 range. Traders should adjust their positions accordingly, using any recovery to reduce longs and initiate shorts in weaker pockets.