Indian equities opened flat on October 29th but quickly retreated into negative territory, erasing the previous session’s gains. Market analysts attribute this decline to persistent caution stemming from underwhelming corporate earnings and continued foreign investor selling.
Market Performance and Key Drivers
At 9:50 AM, the Sensex had fallen 424 points, or 0.5 percent, to 79,580, while the Nifty had declined 137 points, or 0.6 percent, to 24,201. This downturn is largely attributed to sustained selling by Foreign Institutional Investors (FIIs) and weaker-than-expected earnings reports. However, some stability is anticipated as Diwali approaches, buoyed by strong results from ICICI Bank and a few public sector banks.
“The market remains under pressure, driven by FII selling and weak earnings, although strong results from ICICI Bank and a few PSU banks could offer some stability as Diwali approaches,” commented Aishvarya Dadheech, Founder & CIO of Fident Asset Management. “Geopolitical risks have somewhat eased and the overnight drop in crude oil is a positive sign for India’s inflation outlook. However, the dollar’s strength continues to weigh on emerging market currencies and an elevated 10-year yield indicates a risk-off sentiment as funds shift back to developed economies.”
Sectoral Performance and Key Stocks
The IT, telecom, and auto sectors were the primary laggards on the Nifty, while power stocks showed gains. The Nifty IT index slipped 0.5 percent, dragged down by Infosys and Tech Mahindra, while the auto index fell nearly 1 percent with M&M, Tata Motors, and Maruti Suzuki leading the decline.
Shriram Finance, Britannia, Bharti Airtel, Maruti Suzuki, and HUL were among the top losers on the Nifty 50, each declining between 0.5 and 1 percent. Conversely, NTPC, ICICI Bank, Dr. Reddy’s, Coal India, and SBI emerged as the top gainers, advancing between 0.5 and 2 percent.
Bharti Airtel’s shares fell nearly 3 percent in early trading, making it the worst performer on the Nifty 50, despite posting a strong September quarter fueled by recent tariff hikes.
Market Outlook and Global Factors
Despite the weakness in benchmark indices, the broader market showed resilience, with both the BSE Midcap and BSE Smallcap indices edging up 0.2 percent.
“Nifty could now rise to face resistance at 24,567, while the 24,073-24,135 band could offer support in the near term,” noted Deepak Jasani, Head of Retail Research at HDFC Securities. He emphasized that sustaining this upward movement in the coming days will be crucial to reviving buying interest among investors.
Asian indices presented a mixed picture, even after gains on Wall Street, where US indices rose overnight in anticipation of earnings reports from major technology companies. Oil prices eased to $71 per barrel after Israel’s retaliatory strike against Iran over the weekend spared oil and nuclear facilities.
Market experts predict increased volatility in the coming period due to uncertainty surrounding the US presidential elections.
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