Pre-Market Report: Nifty Eyes 23,500; Crude Oil Slumps, US Tech Stocks Decline

Pre-Market Update at 7:45 AM: Indian equity markets to enter Tuesday's session on a positive note after a strong rally on Monday, November 2. The Nifty 50 surged 388 points, or 1.68 per cent, to close at 23,440.80, while the Sensex gained 1,233 points, or 1.66 per cent, to settle at 75,692.78. The rally was led by Reliance Industries, while falling crude oil prices provided additional support. However, weakness in U.S. technology stocks and geopolitical uncertainty could limit gains. The Nifty 50 faces an important resistance zone between 23,500 and 23,600.

GIFT Nifty was last quoted at 23,514 up by 114 points from previous close, compared with the Nifty 50's Monday closing level of 23,440.80, indicating a premium of 74 points, and a positive opening bias. 

U.S. equity markets ended Monday's session on a mixed note as weakness in technology and artificial intelligence-related stocks offset gains elsewhere. The Dow Jones Industrial Average gained 0.41 per cent to close at 51,983.98, while the S&P 500 declined 0.51 per cent to 7,541.40. The Nasdaq Composite fell 1.07 per cent to settle at 25,164.32. Technology stocks faced pressure amid concerns about rising AI infrastructure expenditure, with Oracle, Intel and other Semiconductor-related companies declining. The U.S. midterm elections on November 3 also remained an important global event.

Asian markets recorded mixed performances in their latest completed sessions. Japan's Nikkei 225 declined 0.33 per cent to 63,081.86, while Hong Kong's Hang Seng gained 0.42 per cent to 23,393.32. China's Shanghai Composite advanced 1.08 per cent to 3,638.03, and South Korea's Kospi surged 2.24 per cent to 5,859.08. European markets ended Monday higher, with the FTSE 100 gaining 0.29 per cent, Germany's DAX advancing 0.63 per cent and France's CAC 40 rising 0.98 per cent. These are November 2 closing figures, not verified November 3 Intraday levels.

Renewed diplomatic engagement involving the U.S. and Iran reduced the geopolitical risk premium in crude oil prices. Brent crude settled at USD 104.77 per barrel, down 7.6 per cent, while U.S. WTI crude declined 7.4 per cent to USD 96.46 on November 2. Lower crude prices could benefit Indian oil marketing companies, aviation operators and paint manufacturers through reduced input costs. However, the benefit for oil marketing companies will also depend on retail fuel pricing and inventory effects.

The Indian rupee closed at Rs 94.84 against the U.S. dollar on Monday, weakening 8 paise from Friday's closing level of Rs 94.76. It touched an intraday low of Rs 95.04 before recovering some losses. The latest accessible market snapshot placed the U.S. Dollar Index around 101.67 and the U.S. 10-year Treasury yield around 4.90 per cent. Higher U.S. yields generally increase competition for emerging-market assets and can influence foreign institutional investment flows. Verified November 3 international gold and silver quotations and corresponding MCX prices were unavailable at the time of preparation.

In the domestic market, the Nifty 50 closed at 23,440.80, with an intraday low of 23,207.05. The Sensex settled at 75,692.78, after moving between 74,978.12 and 75,692.78. Bank Nifty gained 0.58 per cent to close at 55,002.20, with an intraday range of 54,582.00 to 55,046.35.

Foreign institutional investors (FIIs) purchased equities worth a net Rs 3,114.68 crore on November 2, while domestic institutional investors (DIIs) recorded net selling of Rs 392.20 crore, according to provisional cash-market figures. FIIs remained net buyers for a second consecutive session. India VIX closed at 15.50, rising 1.31 per cent, indicating that volatility expectations remained elevated despite the market rally.

For Tuesday's session, Nifty 50 support levels are placed at 23,285 and 23,129, while resistance levels stand at 23,519 and 23,597. Bank Nifty support is placed at 54,707 and 54,413, with resistance at 55,172 and 55,341. These are calculated pivot levels.

On the corporate calendar, SBI, Bajaj Finserv, Solar Industries and Emcure Pharmaceuticals are scheduled to announce their September-quarter results. IPO subscriptions are scheduled to close for four SME issues, while BLS Polymers and SFC Environmental Technologies have scheduled listings. No major CPI, IIP or GDP release is scheduled for November 3.

SEBI issued regulatory frameworks on November 2 covering depository receipts for REITs and InvITs, along with provisions relating to private listed InvIT offers for sale. These developments are broadly neutral to positive for market infrastructure and investment trusts.

Reliance Industries reported a 40.6 per cent increase in quarterly profit to Rs 25,548 crore, supported by its refining, petrochemicals and Jio businesses. Its shares surged 11.6 per cent on Monday, making follow-through buying important. ITC reported September-quarter revenue of Rs 19,114.37 crore and net profit of Rs 4,508.79 crore. Petronet LNG reported quarterly profit of Rs 1,235 crore, compared with Rs 806 crore a year earlier, registering growth of approximately 53 per cent. Marico also remains in focus following its September-quarter business updates.

State Bank of India and Bajaj Finserv are scheduled to announce their Q2 FY27 results on Tuesday, with investors tracking banking, lending and insurance performance. Solar Industries is also scheduled to report its September-quarter results, with attention on Defence and explosives demand.

Aviation, paints and oil marketing companies could benefit from lower crude prices through reduced operating and raw-material costs. Information technology stocks may remain under pressure following weakness in U.S. technology shares. Banking and financial services stocks could witness mixed performance, as positive foreign institutional flows offer support, although Bank Nifty underperformed the broader market during Monday's rally.

Technically, the Nifty 50 formed a strong bullish candle on Monday, closing at its session high and moving above its 50-day exponential moving average. The immediate resistance zone is between 23,500 and 23,600. A sustained breakout above this zone could extend the recovery, while failure to hold 23,285 may expose the index to the 23,200 to 23,130 support region. Global developments, crude oil movements, institutional activity and opening volatility will remain important factors for Tuesday's session.

Disclaimer: The article is for informational purposes only and not investment advice.

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