The Indian stock market continued its decline today, marking the sixth consecutive session of losses. Despite the downtrend, major stocks like Reliance Industries and HDFC Bank offered some support, preventing the indices from facing sharper declines.
The Nifty 50 index closed down by 0.11% at 23,532, and the S&P BSE Sensex fell by 110 points (0.14%) to settle at 77,580. Both indices saw losses of approximately 2.5% for the week, concluding a challenging week for investors.
Early in the trading session, a rally in banking and auto stocks had lifted indices by around 0.50%, though these gains were tempered by declines in FMCG stocks by market close.
Sectoral Performance
Performance varied across sectors, highlighting the unique pressures and opportunities in different industries.
- Top Performers – Nifty Media emerged as the top gainer, with a 2.26% rise driven by selective investor interest. The Realty, Auto, and Banking sectors followed with gains, each closing up by nearly 1%.
- Underperformers – Nifty FMCG recorded a 1.53% drop, facing its fourth consecutive day of losses due to inflationary concerns that may impact consumer spending. Nifty PSE dropped by 0.92%, hitting a five-month low, while the Nifty PSU Bank, Pharma, and Energy sectors also ended the day in the red.
Stock-Specific Movements
In the Nifty 50, 30 stocks closed lower today, with notable declines in FMCG stocks. HUL, Tata Consumer Products, Britannia Industries, and Nestle India each dropped between 2.4% and 3.1%. Stocks such as BPCL, NTPC, and IndusInd Bank also recorded losses exceeding 1%.
Eicher Motors, however, saw a notable increase, up 6.4% following stronger-than-expected earnings in the September quarter. Hero MotoCorp, HDFC Life Insurance, Reliance Industries, and Kotak Mahindra Bank also posted gains, offering support to the broader indices.
Rupee Hits Record Low
The Indian rupee remained under pressure, ending Thursday at a new low of 84.43 against the US dollar, down 4 paise.
This decline reflects ongoing foreign fund outflows and high dollar demand, alongside global trends that favor the US dollar.
The rupee’s all-time low indicates persistent pressure on emerging market currencies, particularly as US bond yields continue to rise with expectations of increased US government spending.
Market Sentiment Heading into Friday’s Holiday
Investor sentiment was cautious, with the markets set to close on Friday in observance of Guru Nanak Jayanti. Many investors opted for limited trading, awaiting potential new market catalysts after the long weekend.
Consequently, both the Sensex and Nifty traded within a narrow range, closing slightly lower. This subdued activity may continue into the upcoming sessions as investors look for further market cues.
Persistent FII Selling Despite DII Support
Foreign Institutional Investors (FIIs) continued to offload shares, selling Rs 2,502.58 crore worth of equities on Wednesday. In contrast, Domestic Institutional Investors (DIIs) lent support by purchasing shares worth Rs 6,145.24 crore.
This divergence reflects differing strategies, with FIIs cautious due to inflation and external market pressures, while DIIs see value in domestic equities amid revised corporate earnings projections.
Broader Market Indices Show Recovery
Outside of the main indices, broader market indices showed a modest recovery, snapping a five-day losing streak. The Nifty Midcap 100 rose by 0.45% to close at 54,043, while the Nifty Smallcap 100 gained 0.81% to end at 17,601.
Although these indices remain down by 4.6% over the week, today’s gains suggest potential resilience in the broader market.
Market Outlook and Factors to Watch
Looking ahead, analysts suggest a cautious approach as investors assess inflation, foreign investor activity, and potential policy changes in the US.
Asian markets remain mixed, with investors gauging the impact of possible shifts in US trade policy. Domestic market conditions may find support from government spending after state and national elections, which could benefit select sectors.
Positive economic data and easing inflation could potentially stabilize markets and boost investor confidence.
Analysts recommend that investors maintain a diversified approach, monitor economic indicators closely, and avoid speculative trading as they navigate these uncertain market conditions.
Disclaimer – This article is intended for informational purposes only and does not constitute financial advice, investment recommendations, or predictions. The analysis, data, and opinions expressed within are based on current market conditions and are subject to change without notice. Past performance is not indicative of future results, and investments in financial markets carry risks, including potential loss of principal. Readers should conduct their own research and consider their individual financial circumstances before making any investment decisions.
