The Indian stock market continued to be impacted by elevated crude prices and surging global bond yields as both frontline indices extended their losing run for the second day on Tuesday, 29 September, falling to a six-month low.
Tracking the weakness in the global markets, the domestic equities began the session on a lower note, and at one point, the indices slipped nearly 1% at their day’s lows before seeing some mild recovery as value buyers stepped in.
Tech and consumer durables have led the losses at the front, while metals and pharma have offered some support.
Indian stock market today
The Nifty 50 closed the session 0.42% lower at 22,683, remaining below the key psychological 23K mark, while the Sensex slipped 0.40% to close at 72,480. The broader markets, too, witnessed selling pressure, as both the Nifty Midcap 100 and Nifty Smallcap 100 indices each closed lower by over 0.50%.
The prolonged losses come as the impasse between the US and Iran over control of the Strait of Hormuz is keeping crude oil prices higher, fueling concerns that inflationary pressures could persist through the end of the year.
Higher oil prices are making the bond market worry that they could lead to widening government debt, and investors have started demanding more compensation, causing global yields to hit multi-year highs. This, in turn, is starting to pressure stocks as higher borrowing costs cloud the outlook for economic growth and corporate earnings.
Vinod Nair, Head of Research, Geojit Investments Limited, “Domestic equities continue to face correction-led headwinds amid volatile crude prices, U.S. Treasury yields hovering near two-decade highs, and persistent FII outflows exerting pressure on the rupee.”
“Adding to the pressure, the unprecedented pace of IPO fundraising is absorbing incremental liquidity. Investor risk appetite remains subdued against a hawkish global backdrop amid rising odds of additional rate hikes later in the year,” he further added.
Asian markets outlook: Will US data provide fresh direction to investors?
Among other key Asian markets, Japan’s Nikkei 225 lost 0.6% to 65,481.27. South Korea’s Kospi declined 0.3%. Hong Kong’s Hang Seng dropped 0.4%. Hong Kong-traded shares of Shein fell more than 12% after the fast-fashion online retail company reported that its adjusted net profit for the latest quarter fell 67% from the year before.
The Shanghai Composite Index was up 0.2% at 3,830.45 following a report from China’s official Xinhua News Agency late Monday that its State Council discussed “improving the effectiveness” of macro policies to help boost its economy.
Taiwan’s Taiex was 0.8% lower, while Australia’s S&P/ASX 200 edged up 0.3% to 8,709.30. On Tuesday, Australia’s central bank lifted its benchmark rate in its fourth hike this year to the highest level in 15 years.
Looking ahead, Asian market activity will be driven by the release of key US economic reports, including job openings, ADP employment, PCE figures and nonfarm payrolls, for fresh signals on monetary policy.
Nifty at 200-week SMA: Can bulls defend the crucial 22,600 level?
Rupak De, Senior Technical Analyst at LKP Securities, said, “The index slipped to its 200-week moving average as the decline extended. This is the first time since the Covid crash that Nifty has fallen to the 200-week moving average, which is currently placed at 22,600.”
He said that a decisive break below this level could trigger a sharper correction in the market. However, Rupak believes that if Nifty manages to hold above 22,600, a similar recovery towards the higher end could be expected. Therefore, 22,600 will remain a crucial support level for Nifty. On the higher end, immediate resistance is placed at 22,800.
Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, said, “From a technical perspective, the Nifty tested the 22,600–22,580 region, near its 200-week SMA, before recovering, suggesting that the long-term support zone attracted some buying interest. This could support a mean-reversion bounce but does not by itself signal a trend reversal. The index would first need to reclaim 22,800 and subsequently move above the 23,000–23,100 zone to strengthen the near-term structure. A decisive break below 22,580, however, could expose the index to 22,400. Bank Nifty remains below its 100-week SMA near 55,175, and its inability to reclaim this level could continue to constrain any broader recovery in the Nifty.”
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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