GIFT Nifty starts in the red, down 10 points; market trading setup for today

Stock markets have seen a slump recently, with both Sensex and Nifty dropping close to 1.5% on Wednesday. The stock market has been struggling due to sustained foreign fund outflows, weakening demand in certain sectors, and a fluctuating rupee. Today, market participants are preparing for another cautious trading session, with GIFT Nifty showing a slight dip of 7 points, indicating a flat or muted start.
Foreign Outflows and Impact on Market Sentiment
Foreign institutional investors (FIIs) have been pulling funds out of Indian equities at a record pace. This November alone, FIIs have withdrawn over Rs 27,600 crore. Since Nifty’s peak on 27 September, FIIs have removed around Rs 1.2 lakh crore from Indian markets, resulting in a 10% drop in the index and a breach of the 200-day moving average in intraday trading.
This trend has created a bearish sentiment, especially in stocks like Axis Bank, Voltas, NMDC, and REC. Voltas, in particular, is seeing strong selling pressure, with downside targets around Rs 1,617 and Rs 1,559, according to Prashanth Tapse, Senior VP of Research at Mehta Equities.
“Caution remains key, with bearish sentiment on stocks like Axis Bank, Voltas, NMDC, and REC, and aggressive downside targets set for both Nifty and Bank Nifty. Voltas is a preferred sell, with targets at Rs 1,617/1,559 and key resistance at Rs 1,793,” said Tapse.
US Market Influence and Inflation Data
The US market often influences global stock trends, including in India. In recent months, US inflation has dropped from a high of 9.1% in June 2022 to 2.4% in September 2024, the lowest since February 2021. Core consumer price inflation, which excludes food and energy, rose slightly to 3.3% in September. With inflation rates stable, market participants are speculating that the US Federal Reserve may cut interest rates in December.
Investors are closely watching the US economic data as a guide for global market trends. A rate cut could provide relief to the equity markets, but a strong dollar, which has recently reached a one-year high against other major currencies, is adding pressure to emerging markets, including India.
GIFT Nifty Indicates Caution Ahead
GIFT Nifty (formerly SGX Nifty) indicated a muted start today, trading lower by 7 points at 23,636.50. Analysts are monitoring Nifty closely for further support levels. A break below 23,500 could push the index further down to levels around 23,300-23,200. Hrishikesh Yedve of Asit C. Mehta Investment Intermediates suggests that market sentiment remains negative, and Nifty’s behaviour around the 200-day exponential moving average (EMA) will be crucial.
Domestic Market Weakness and Sector Impact
The Indian market faces additional pressure from the rupee, which remained steady at 84.39 against the US dollar on Wednesday.
Weakness in the auto, infrastructure, and consumer sectors has also led to concerns about growth in India. FIIs continue to offload stocks, and there is a risk that Portfolio Management Services (PMS) companies may sell for higher returns in other regions.
According to VLA Ambala, Co-Founder of Stock Market Today, the Nifty could face additional declines of 3-5%, with support levels around 23,460 and 23,200. A “sell on rise” strategy is advised by some analysts to mitigate risks during these uncertain times.
“During the last session, the RSI readings have notably cooled off on the daily and weekly timeframes, but they remain above 64 on the monthly frame, indicating more room for Bears Cartel. Propelled by these developments, Nifty can gather support around 23,460 and 23,200 and face resistance near 23,850 and 23,940 in the next session,” said Ambala.
Global Markets Overview
In the US, the Dow and S&P 500 ended slightly higher on Wednesday, while the Nasdaq saw a small decline. These movements came as October consumer price data met market expectations, supporting hopes for a rate cut by the Federal Reserve. In Asia, shares rose modestly, with Japan’s Topix gaining 0.6% and Australia’s S&P/ASX 200 increasing by 0.5%, though Hong Kong’s Hang Seng futures fell by 1%.
Oil Prices and Market Expectations
Oil prices dropped slightly on Thursday, with prices around $68 per barrel. This decline comes on expectations of higher global production, as well as weaker demand forecasts. A stronger US dollar has also weighed on oil prices, which is generally favourable for countries like India that are major oil importers.
Stocks in F&O Ban
Several stocks remain in the Futures and Options (F&O) ban list today. This includes:
Stocks are placed in the F&O ban when trading volumes cross 95% of the market-wide position limit.
Foreign and Domestic Institutional Activity
On Wednesday, foreign portfolio investors (FPIs) turned net sellers, withdrawing Rs 2,502 crore from Indian markets. Meanwhile, domestic institutional investors (DIIs) stepped in, buying shares worth Rs 6,145 crore. These movements reflect FIIs’ caution and DIIs’ continued support for domestic equities despite ongoing challenges.
Technical View and Analyst Suggestions
Ajit Mishra, Senior Vice President of Research at Religare Broking, said that Nifty’s decline of more than 10% from its record high has brought it close to a major moving average support level. This confluence of support and oversold market conditions could lead to a rebound, though gains might be limited to select stocks. Traders are advised to keep positions hedged and to monitor support levels closely.
India VIX, a measure of market volatility, rose by 5.8% on Wednesday to reach 15.44. The higher VIX indicates increased market caution, and analysts recommend a balanced approach to trading, with close attention to Nifty’s technical levels.