Stock Market Today: High impact of US developments

Polling for the U.S. presidential election is set for November 5, coinciding with the U.S. Federal Reserve Committee meetings on November 6 and 7. These events are expected to significantly influence foreign investment trends, potentially impacting domestic stock markets this week. Domestically, corporate earnings will play a crucial role in shaping investor sentiment. Analysts anticipate that the gains in standard indices for the new financial year, which began on the 1st, may be moderate, attributed to lackluster corporate results for two consecutive quarters. Fund managers forecast Nifty-50 companies’ net profits may grow by 5-7% in 2024-25. Projections for the Nifty-50 index vary, with some analysts predicting it could dip below 24,000 points, while others suggest limited gains but expect resistance around 24,500. Here’s a breakdown of analyst insights by sector:
• IT Stocks: IT shares may face challenges ahead of U.S. election results, with some brokerages suggesting that a Trump victory could be favorable for the markets.
• Telecom: Telecom stocks are expected to follow the benchmark indices, with revenue growth anticipated in the coming quarters due to June’s tariff hike.
• Oil: Oil company shares may stagnate, impacted by Middle Eastern developments and international oil prices.
• Metals: Metal stocks could outperform, driven by strong results from companies such as Tata Steel and Jindal Steel, whose earnings are due this week.
• Pharmaceuticals: Pharma stocks could be volatile due to international market sentiment, with results from Dr. Reddy’s (5th), Mankind Pharma (5th), Apollo Hospitals (6th), Lupin (7th), and Divi's Labs (9th) expected to affect these shares.
• Machinery: Analysts maintain a positive outlook on machinery companies, but high valuations and subdued sentiment may limit movement. One brokerage has recommended BHEL with a target price of ₹425.
• FMCG: FMCG stocks could face pressure amid concerns over rural and urban demand. One brokerage has reduced its target price for Procter & Gamble Hygiene by 4% to ₹17,800.
• Cement: Slowing earnings growth, weak demand, and diminished pricing power might cap gains in cement stocks. However, an increase in government infrastructure spending is anticipated to drive demand by March.
• Banking: Bank Nifty may trade within a range with a positive bias, with support around 51,000-51,150 and resistance at 52,580. SBI’s results, expected on Friday (8th), will be closely watched.
• Automobiles: Vehicle stocks may face a dip following weaker September quarter results and lukewarm October sales figures.
Board Meetings Today: Key companies holding board meetings today include Amararaja Energy and Mobility, Gland Pharma, Sai Silks Kalamandir, IRCTC, Andhra Paper, Raymond, IRFC, ABB India, Sundaram Finance, Exide Industries, KEC International, Hutson Agro Products, Bata India, Procter & Gamble Health, and JK Paper.
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