Weak global cues subdue equity markets, auto stocks slide

Mumbai, Oct 26 (SocialNews.XYZ) Weak global cues, along with profit booking and expensive propositions, subdued the Indian equity market on Monday.

All indices ended in the negative with metals, auto, realty and pharma falling the most.

Globally, Asian markets were mixed with traders increasingly pessimistic if US lawmakers will pass a new stimulus package before next week's election, while spiking virus cases fanned worries about the economic impact of new containment measures.

Similarly, European shares fell after SAP, one of the region's biggest tech groups, warned that the new coronavirus lockdowns in countries have hit demand for its services.

Besides, oil prices sank more than 3 per cent on fears that rising infections would hit demand.

The Nifty50 on the National Stock Exchange closed at 11,767.75, lower by 162.60 points, or 1.36 per cent, from its previous close.

The Sensex closed at 40,145.50, lower by 540 points, or 1.33 per cent, from its previous close of 40,685.50.

"Nifty has filled the upgap formed on Oct 19 and shows a lower top formation. 11,661 is the crucial level, a fall below which will mean a lower bottom formation in addition to lower top," said Deepak Jasani, Head of Retail Research at HDFC Securities.

"On upsides, 11,876-11,897 could provide resistance."

Vinod Nair, Head Of Research at Geojit Financial Services, said: "Volatility was expected as we are nearing the US election date. The prices are high which limits the capacity of the market to handle uncertainties though the final outcome of the election is unlikely to change the long-term trend of the global market.

"Rising Covid cases in the US & Europe and delay in US stimulus has added worries. Indian markets are taking a correction from the recent rally which has factored a lot about a uptrend in earnings growth due to positive Q2 results."

"Indian indices are expected to remain weak in the near-term and will be driven by the trend of ongoing Q2 result and developments in the US. A big correction is unlikely with 11,500 as a strong support for Nifty50."

Rahul Sharma, Market Strategist and Research Head, Equity 99, said: "Rising Covid-19 cases and no progress on US stimulus package has been creating a panic in the market. The Indian market followed the asian market that got the week off to a hesitant start as surging coronavirus cases in Europe."

"On Monday, there was a sell-off seen in all the sectors. The panic will continue with the rise of cases and till no clear progress on US stimulus package. The coming US election will also add to more selling in the market."

Source: IANS