Navigating Resilience Amidst Market Volatility

Market Synopsis
During Diwali week, the Indian stock market experienced significant volatility, with NIFTY 50 closing with a slight upside of .51% at 24,304.35 this week. The Indian VIX which measures market volatility, increased by 8.68% to close at 15.90 this week.
This volatility was largely driven by a continued selling spree from Foreign Portfolio Investors (FPIs) influenced by geopolitical tensions and more attractive valuations in the Chinese stock market mitigated by positive developments in the automotive sector, where robust monthly sales data lifted stock prices. Additionally, Public Sector Undertaking (PSU) bank shares rallied following encouraging earnings reports from several state-owned banks, further supported by heightened investor activity during the Muhurat trading session.

The month of October saw record–high FPI outflow on high market valuations. The FPI sell figure of ₹1,13,858 crore through the exchanges in October is the single highest absolute selling ever in a month by FPIs. This relentless selling contributed hugely to the about eight per cent decline in benchmark indices from the peak and is a major driver behind bringing the market prices down.

Top Gainers:
1.Adani Enterprises(9.51%)
2.LT(9.02%)
3.Eicher Motors(7.88%)

Top Losers:
1.Tech Mahindra(-6.57%)
2.Infosys(-5.43%)
3.HCL Technologies(-5.13%)

Major Market Developments:
● Mcap of 5 of the top 10 most valued firms has gone up with SBI as the biggest gainer and Infosys as the top loser.
● Reliance Industries issued a bonus in the ratio of 1:1. This marks a significant event as it is the sixth bonus issue in RIL’s history and is touted as the largest in Indian corporate history.
● Waaree Energies Limited shares opened at a premium of 66.33% above its allotment price of ₹2500 and continued to rise closing at ₹2895 on 1st November.
● Muhurat Trading saw an increase in 42 out of the Nifty 50 stocks.
● Individual small and midcap stocks enjoyed a northward rally with shares of WPIL Ltd surging  as high as 44.16% in one week.

FII, DII Activity:
Net Cash(in Rs. crores):
28th October, Monday:
FII- (3228.08)
DII- 1400.85
29th October, Tuesday:
FII- (548.69)
DII- 730.13
30th October, Wednesday:
FII- (4613.65)
DII- 4518.28
31st October, Thursday:
FII- (5813.30)
DII- 3514.59
1st November, Friday:
FII- (211.93)
DII- (377.33)

Technical Analysis:
The Nifty 50 closed at 24,304.35 by November 1, indicating a minor rise of 0.51% over the week. The market continued to remain flat throughout the week. There was high selling pressure throughout the market.
The index had gone below 24,150 on early Monday morning but recovered from there. The current chart indicates a support level of 24,135. The immediate resistance level is at 24,500. The market has shown slight signs of recovery however investors remained cautious throughout the week.

From a technical perspective, the breakdown of 24,150 shows 24,000 as the next major support. The next 3 support levels are at 23,843.70, 23506.60 and 22939.30.
The Relative Strength Index (RSI) at 37.20 shows that the index is still in the oversold category. If the Nifty 50 can breach the level of 24,500 then there could be a strong buying potential.

In summary, the Nifty 50 has shown an increase of 0.51%, which indicates that the market is still flat. Levels of 24,150 and 24,500 are a critical level to watch.