Bears continued to tighten their grip on Dalal Street on November 5 amid weak global cues, extending the intense sell-off seen in the previous session. Investors remain cautious as they brace for a pivotal week with two major events on the horizon: the U.S. presidential election and the Federal Reserve’s monetary policy meeting.

At open, the Sensex was down 237.53 points or 0.30 percent at 78,544.71, and the Nifty was down 60.10 points or 0.25 percent at 23,935.20. About 911 shares advanced, 854 shares declined, and 100 shares unchanged.

Hindalco, JSW Steel, Tata Steel, Nestle, and HCL Tech were among the major gainers on the Nifty, while losers were Coal India, Reliance, Trent, Titan Company, and Bharat Electronics.

Markets are expected to remain subdued on the back of several global events, consistent FII selling, and tepid earnings by domestic companies so far. This week will be crucial as several index heavyweights including Dr Reddy’s and Titan will announce results leading to stock-specific action.

Fundamental View

Domestic issues are weighing on markets. With two-thirds of Nifty 50 companies missing their earnings estimates in Q2, Nifty 50 earnings for FY25 have been drastically revised down to less than 10 percent from the consensus 15 percent earlier.

With this kind of earnings downgrade it would be difficult to sustain the current valuation. This is the rationale for the relentless FII selling which might continue for some more time, according to V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

"Investors can opt for the safe strategy of remaining invested and accumulating stocks in segments which can weather the volatility. Apart from leading financials, auto stocks like Eicher Motors and M&M have exhibited earnings momentum and improving prospects, going forward," he added.

Traders are advised to remain cautious, with sell positions recommended on both Nifty and Bank Nifty, while selective stocks like Lupin and Bank of Baroda are viewed positively for the short term, according to Prashanth Tapse, Senior VP (Research), Mehta Equities.

Technical view

A long bear candle was formed on the daily chart with a minor lower shadow. Technically, this candle pattern indicates a decisive downside breakout of the range movement.

"The short-term trend of Nifty continues to be down and one may expect more weakness in the short term. The next crucial lower support to be watched is around 23,500, which is the 200-day EMA. Any bounce back from here could find strong resistance around 24,200 levels," said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

Bank Nifty, which saw a sharp decline in the previous session, is likely to trade within a range of 52,500 – 50,500 and with a negative bias. "Crucial support is placed at 50,720 – 50,600 while resistance is placed at 51,750 – 51,800," said Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas.