Market Commentary     03-Oct-24
Mid-Session
Sensex slumps 1,230 pts; VIX soars 9.57%
The headline equity benchmarks extended losses in mid-morning trade amid mixed cues from global markets and fears of full fledged war between Iran and Israel. The fall was also triggered by SEBI's new F&O rules. The Nifty traded below the 25,400 level. Auto shares declined after advancing for in the previous trading session. Trading was volatile due to weekly F&O series expiry today.

At 11:30 IST, the barometer index, the S&P BSE Sensex tumbled 1,230.68 points or 1.46% to 83,045.56. The Nifty 50 index dropped 372.85 points or 1.45% to 25,424.05

In the broader market, the S&P BSE Mid-Cap index slipped 1.33% and the S&P BSE Small-Cap index declined 1.32%.

The market breadth was weak. On the BSE, 1,165 shares rose and 2,640 shares fell. A total of 125 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, jumped 9.57% to 13.14.

SEBI's new F&O rules:

The Securities and Exchange Board of India's (SEBI) introduced a six-step plan to curtail retail participation in speculative index derivatives. This could result in a significant decline in trading volumes. New regulations require traders to maintain higher margins, potentially hindering their ability to take on larger leveraged positions. Moreover, the reduction of weekly options expiries to one per exchange could lead to decreased revenues for exchanges and brokers. This change means that each exchange will only offer weekly contracts for one benchmark index instead of the current two to four. These measures are designed to reduce excessive speculation in the futures and options (F&O) segment, where retail investors often find themselves on the losing end of trades.

Buzzing Index :

The Nifty Auto index fell 1.86% to 26,579.05. The index rose 0.21% in the past trading session.

Apollo Tyres (down 4.15%), Eicher Motors (down 3.64%), Balkrishna Industries (down 3.2%), Tata Motors (down 2.83%), TVS Motor Company (down 2.72%), Bajaj Auto (down 2.26%), Maruti Suzuki India (down 2.12%), Samvardhana Motherson International (down 1.77%), Exide Industries (down 1.46%) and MRF (down 1.37%) slipped.

Stocks in Spotlight :

Yes Bank fell 1.20%. The bank has reported 13.1% growth in loans & advances to Rs 236,512 crore as on 30 September 2024 as compared with Rs 209,106 crore as on 30 September 2023.

Aurobindo Pharma rose 1.14% after the pharma major has received USFDA approval for cephalexin tablets. Cephalexin tablets are used to treat infections caused by microorganisms.

Dabur India slipped 6% after the company expects to post a mid-single-digit decline in consolidated revenue for the September quarter (Q2 FY25), primarily attributed to heavy rains and floods affecting various regions of the country.

Global Markets:

Asian stock market traded higher on Thursday, mirroring a cautious sentiment across global markets amid escalating tensions in the Middle East. Japan's Nikkei 225 surged over 2%, while markets in China and South Korea remained closed for a holiday.

Geopolitical tensions in the Middle East have spiked following Iran's missile attack on Israel on October 1. Israel's subsequent ground incursions into Lebanon targeting Hezbollah, an Iran-backed militia group, have exacerbated concerns about potential oil supply disruptions and increased uncertainty in global financial markets.

In the United States, stock markets closed with modest gains on Wednesday. The tech-heavy Nasdaq Composite rose slightly by 0.08%, while the S&P 500 and Dow Jones Industrial Average inched up by 0.01% and 0.09%, respectively. Investor caution persisted, however, due to Middle East tensions and the anticipation of additional US labor data.

Key US tech stocks witnessed mixed performance. Nvidia gained 1.6%, while Tesla experienced a 3.5% decline. Humana Inc. and Nike faced significant losses, with drops of 11.8% and nearly 7%, respectively.

The ADP National Employment Report indicated that US private payrolls grew more than expected in September, adding 143,000 jobs. This surpassed economists' forecasts and highlighted the strength of the US labor market despite broader economic uncertainties.

The US job market's resilience was further underscored by the unexpected increase in job openings in August. The Job Openings and Labor Turnover Survey (JOLTS) revealed a rebound of 329,000 job openings, exceeding analysts' expectations. While hiring declined slightly, layoffs decreased.

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