Sensex & Nifty End in Green: What to Expect on November 6

Nifty Prediction

Sensex & Nifty Close with Gains: What to Expect on November 6

Indian stock markets made a strong comeback on November 5, with both the Sensex and Nifty ending the day in positive territory.

After witnessing a sharp decline earlier in the week, the Indian equity indices managed to recover, powered by a rally in key sectors such as banking, metals, automobiles, and oil & gas.

The Nifty closed at 24,192.50, gaining 197.20 points or 0.82%, while the Sensex closed at 79,476.63, rising by 694.39 points or 0.88%.

This recovery was particularly impressive as it came after a volatile trading session, underlining the resilience of the Indian market despite broader global uncertainties.

Market Performance on November 5

The stock market began the day on a shaky note, but investor sentiment improved as the session progressed.

Towards the end of the day, broad-based buying in sectors like banking, metals, and automobiles helped drive the indices higher, with Nifty managing to close just above 24,190.

BSE Midcap and Smallcap indices also saw gains of 0.4%, indicating a positive undertone across the market, although these broader indices lagged behind the front-line stocks in terms of performance.

Sectoral Performance: Most sectors ended the day in the green, with banking, metals, auto, and oil & gas stocks showing the most strength.

The Nifty Bank index gained 1.5%, with heavyweights such as Axis Bank, ICICI Bank, and HDFC Bank leading the charge.

Similarly, metal stocks such as JSW Steel, Tata Steel, and Hindalco surged, benefiting from favorable global cues, while auto stocks like Bajaj Auto and Mahindra & Mahindra saw strong buying interest.

On the downside, FMCG and media stocks lagged, with the sectoral indices posting marginal losses.

Top Gainers and Losers:

• Top Gainers on Nifty: JSW Steel, Tata Steel, Hindalco Industries, Bajaj Auto, and Axis Bank were the top performers, posting gains between 3-6%.
• Top Losers on Nifty: Coal India, Trent, Adani Ports, Asian Paints, and ITC were among the stocks that saw declines.

Despite the overall positive finish, market breadth was slightly in favor of advancers, with 2,337 stocks advancing compared to 1,448 stocks declining. 102 stocks remained unchanged.

Technical Outlook: What Lies Ahead on November 6?

From a technical standpoint, the market showed signs of a recovery after a brief pullback. According to Rupak Dey, Technical Analyst at LKP Securities, Nifty has found solid support around its historical swing low for the second consecutive day.

A piercing line candlestick pattern has formed on the daily chart, signaling a potential return of bullish momentum.

This technical setup is particularly significant as it indicates a possible reversal from the recent correction, provided the support levels hold.

In addition to the candlestick pattern, positive divergence in the RSI (Relative Strength Index) suggests that the selling pressure may be abating.

Moreover, the index is now trading above its 150-day moving average (DMA), another positive indicator for the bulls.

Key Levels to Watch:

• Immediate Support: The critical support for Nifty lies at 23,800. A break below this level could signal further weakness in the market, potentially driving Nifty towards 23,500.
• Immediate Resistance: On the upside, the next key resistance is seen at 24,370, followed by 24,750-24,800, which are key resistance zones for the short-term.
• Market Strategy: As long as Nifty remains above the 24,000 level, traders can consider buying on dips to target the next resistance zone. However, if Nifty slips below 24,000, traders should exercise caution, as this could indicate a deeper correction.

Aditya Gaggar, Director at Progressive Shares, also highlighted the volatility that dominated the session.

The market initially opened lower, with indices slipping into the red. However, the banking sector’s recovery helped lift the index from its lows, with metal stocks joining in later to add further strength.

The formation of a double bottom pattern is seen as a constructive development, indicating that Nifty may have bottomed out at the recent lows.

Impact of Global Factors: US Election and FII Flows

Global developments are also weighing heavily on the markets, with all eyes on the US Presidential election.

The uncertainty surrounding the election results has contributed to increased volatility in global equity markets, including India.

On November 4, the Indian benchmark Sensex fell by as much as 1,500 points intra-day, underscoring the risk-off sentiment fueled by global uncertainties.

Foreign Institutional Investors (FII) Activity:
Foreign investors have been net sellers in Indian markets, with Rs 94,000 crore withdrawn in October—the largest outflow in 2023.

This trend continued into November, with FIIs selling shares worth Rs 4,329.79 crore on November 5 alone.

Analysts attribute this to a combination of global uncertainty, particularly related to the US election, and rising concerns over the global economic outlook.

US Election Impact:
The uncertainty around the US election is a key factor influencing global risk sentiment. Sheetal Malpani, Chief Investment Officer at Tamohara, points out that there has been a shift in capital flows, with some investors moving their funds back to the US in anticipation of a potential victory for Donald Trump.

The strengthening of the US dollar is another factor contributing to this trend, as investors seek safety in the world’s reserve currency.

Impact on Emerging Markets:
Trump’s tough stance on trade, particularly his focus on tariffs and import duties, could pose challenges for emerging markets like India.

While China is likely to be the primary target of his policies, India could also feel the ripple effects, particularly in sectors like exports and manufacturing.

While the US markets could benefit from a potential tax cut and deregulation, the global volatility could continue to put pressure on emerging market assets in the short term.

Final Remarks: Market Prediction for November 6 and Beyond

The Indian stock market is likely to remain volatile in the near term, driven by both domestic and global factors.

However, with technical indicators showing signs of support and bullish reversal on the charts, traders may continue to find buying opportunities on dips, particularly if Nifty holds the 24,000 level.

Key levels to watch:

• Support at 23,800 and Resistance at 24,370.
• A break above 24,370 could open the door for a rally towards 24,750-24,800.
• If Nifty slips below 23,800, traders should prepare for further weakness and adjust their positions accordingly.

Overall, while caution is advised due to the global uncertainties and foreign outflows, the market’s technical structure suggests that there could be upside potential if key support levels hold.