Market Overview 14th Oct'24: Bulls Charge Dalal Street

On October 14, 2024, Indian markets saw a robust performance as bulls took charge, leading to significant gains for major indices. After a few range-bound sessions, the Nifty managed to climb above 25,150, showing intraday strength, while the Sensex also ended on a positive note. This rally was driven by strong buying across most sectors, with the exception of metals and media. The optimistic sentiment was underpinned by positive global cues, which helped in maintaining the market momentum throughout the day.

Indices Performance: Nifty and Sensex Climb Higher

The trading session ended with the Sensex gaining 591.69 points, or 0.73%, closing at 81,973.05. Similarly, the Nifty surged by 163.70 points, or 0.66%, to settle at 25,128. This rise marked a successful break from previous consolidation phases, signaling a stronger upward trend. IT, realty, and banking stocks were the top contributors to this bullish movement, driving the Nifty past the 25,150 mark during intraday trading.

Sectoral Analysis: IT, Realty, and Banking Stocks Lead

Throughout the trading session, buying activity was prominent across various sectors. Information Technology, realty, and banking stocks emerged as the top performers, each recording approximately a 1% increase. On the other hand, metal and media sectors were the only ones to end in the red, showing a lack of investor interest. The strong performance in key sectors helped sustain the overall market rally, reinforcing the bullish sentiment.

Top Gainers and Losers

Key gainers on the Nifty included Wipro, Tech Mahindra, HDFC Life, L&T, and HDFC Bank, all of which showed notable gains. Conversely, some major companies like ONGC, Maruti Suzuki, Tata Steel, Bajaj Finance, and Adani Enterprises ended the session in the red. This mixed performance indicates selective buying, particularly favoring sectors poised for growth.

Midcap and Smallcap Stocks: Mixed Performance

The BSE midcap index recorded a modest gain of 0.3%, while the smallcap index ended almost flat, indicating a relatively subdued performance compared to the large-cap indices. Despite this, over 240 stocks on the BSE reached their 52-week highs, reflecting strong underlying market confidence. Among these were prominent names like Aptus Value, Oberoi Realty, Tech Mahindra, Persistent Systems, and HCL Technologies.

Market Outlook for October 15

According to Aditya Gaggar, Director of Progressive Shares, the market's positive momentum is likely to continue, especially if Nifty can move convincingly above the 25,200 resistance level. The immediate support for Nifty is seen at the psychological level of 25,000, while resistance lies between 25,160-25,200. Technical patterns, including a bullish Marubozu candlestick on the daily chart, further support this upward trend. However, sustained movement in the lower timeframes will be key to confirming this breakout.

Technical Analysis Insights

Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas, observed that the Nifty opened with a gap-up and maintained a positive bias throughout the day, closing with gains of around 164 points. He anticipates continued upward movement towards the 25,500 mark, as indicated by a positive crossover in the hourly momentum indicator. This buy signal suggests that the Nifty's recent consolidation phase has concluded, with support shifting higher to 24,920.

Similarly, the Bank Nifty index broke out of a three-day consolidation period, moving towards the 52,500 level. Support for this index has also shifted higher, indicating the potential for further gains.

Conclusion: Positive Momentum Expected to Persist

The Indian stock market showed a strong performance on October 14, 2024, driven by gains in IT, realty, and banking stocks. With positive global cues and supportive technical patterns, the outlook for the next trading session remains optimistic. Analysts expect Nifty to maintain its upward trajectory if it can breach resistance at 25,200, while Bank Nifty also shows potential for further gains. Investors are advised to remain cautious yet optimistic, as market conditions indicate a continuation of this bullish trend in the near term.Bottom of Form

 

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Oil Surges Following Iran’s Attack on Israel, Raising Fears of Supply Disruptions

Global oil prices soared for the second consecutive day after Iran launched 200 ballistic missiles at Israel, prompting a vow of retaliation from Israeli Prime Minister Benjamin Netanyahu. This escalation has intensified concerns about potential disruptions in crude oil supplies, particularly as the Middle East is responsible for nearly one-third of the world's oil production.

Brent Crude Reaches New Heights

Brent crude, the global oil benchmark, surged beyond $74 per barrel after briefly spiking by more than 5% following the Iranian assault. West Texas Intermediate (WTI), the U.S. oil benchmark, also climbed, nearing $71 per barrel. Despite these increases, both Brent and WTI remained below their previous peaks.

Risk Premiums and Safe Haven Assets Surge

Investors are increasingly pricing in a renewed risk premium on oil, a crucial global commodity. The attack has also driven up the value of safe haven assets such as bonds, gold, and the U.S. dollar as the risk of further conflict in the region looms large.

Historical Context and Current Conflict

The conflict between Israel and Iran dates back to the outbreak of the Gaza war nearly a year ago, where Tehran-backed Hamas has been at the center of hostilities. Despite this long-standing conflict, oil price spikes due to tensions have historically been short-lived unless accompanied by direct disruptions to oil production. In August 2024, Iran was producing approximately 3.4 million barrels of oil per day, according to OPEC.

Potential Impact on Energy Infrastructure

Experts warn that energy infrastructure could become a target in this escalating conflict. RBC Capital Markets notes that Iran's Kharg Island export facilities could be at risk, and Iran and its allies might attack energy installations to internationalize the conflict if it intensifies.

Middle East Tensions Heightened by Hezbollah Chief's Death

The situation in the Middle East has further escalated after the killing of Hezbollah's leader, Hassan Nasrallah, which prompted Israeli airstrikes on Beirut. In response, Israeli troops have initiated targeted ground raids in Lebanon. Hezbollah, like Hamas, is backed by Tehran, and the possibility of these proxy conflicts expanding is increasing.

Statements from Leaders

Following the missile attack, Iran's Foreign Minister Abbas Araghchi stated that their action was concluded unless Israel retaliates further. Netanyahu responded with a strong statement, asserting that Iran had made a grave mistake and would face consequences.

Future of Oil Prices

Analysts from ANZ Group Holdings suggest that any sustained rally in oil prices will depend on whether Israel responds with a direct military strike on Iran, particularly targeting its military, infrastructure, or oil industry.

OPEC+ Meeting

OPEC+ is scheduled to hold an online meeting to review global oil markets. The group is expected to discuss reviving some of its idled production starting in December, after previously delaying the plan.

In the U.S., the American Petroleum Institute reported a 1.5 million barrel decline in nationwide crude inventories, marking the third consecutive weekly drop if confirmed by official figures.

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