Bloodbath on the D-Street entered its fifth straight day today, with Nifty dipping by 218 points to close the day at 24,180.80, much below the 25,000-mark. Sensex also dropped a massive 662 points to close the week at 79,402.29 points. Notably, this was the worst weekly run experienced by the markets over the last 14 months.
Clearly, the markets are not in the mood to embrace the impending festivities. Only 12 out of 50 stocks on the Nifty50 advanced today, while the other 38 declined. It was no different on the BSE, where an astounding 3,101 stocks slipped during the day, while just 841 inched up.
Smallcaps bore the biggest brunt of this drawdown, with the smallcap 100, 50, 250, and microcaps each sliding by over 2% during the day. Amidst sectors, media, metal, PSU banks, consumer durables, and oil and gas skidded over 2% each today.
Gaurav Garg, Research Analyst at Lemonn Markets Desk, explains that on a weekly basis, benchmarks had recorded five consecutive daily losses. Markets appear oversold, with RSI (Relative Strength Index) falling to 27 levels, its lowest in more than a yearHyderabad Stocks. Persistent foreign outflows with a record ~97000 crores so far in October, along with disappointing Q2 earnings, have led to sharp valuation corrections in stocks with high multiples as investors adjust their expectations for future growth.
Per media reports, investors saw their wealth diminish by a massive Rs 6.80 lakh crore today, largely due to a sharp, 18% dip in the shares of IndusInd Bank and uncontrolled exodus of foreign investors. Reportedly, IndusInd Bank reported a 40% decline in its net profits for the quarter ended September 30, 2024.
"Another major factor contributing to this dip is disappointing earnings reports from Indian companies, especially in the consumption sector, which signal an economic slowdown, particularly in urban consumption," Santosh Meena, Head of Research at Swastika Investmart, said.
Mahindra & Mahindra, Larsen & Toubro, NTPC, Adani Ports, Tata Steel, Maruti, Bajaj Finance and Titan were also among the laggards.
"Markets continued its downward trajectory as a broader selloff pulled down key benchmarks with Sensex ending below the crucial 80k mark. The dismal Q2 earnings so far has aggravated the investors' woes while persistent FII selling continued to create havoc in the market," said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.
On October 24, 2024, i.eJaipur Wealth Management. yesterday, foreign investors offloaded a massive Rs 5,062.45 worth of equities, while domestic investors remained net buyers, purchasing around Rs 3,620.47 crore worth of shares. Thus far in October, foreign investors have pulled out a record Rs 97,205.42 crore from Indian markets.
Shrikant Chouhan, Head Equity Research, Kotak Securities expects that the "market sentiment will continue to be weighed down by weaker-than-expected Q2FY25 earnings prints and continued weak commentary. FPI flows are expected to remain volatile in the days to come".
"Indian equity markets corrected sharply this week as FII continued with selling in Indian markets. Benchmark indices (Nifty 50 and Sensex 30) declined between 2-3% this week. The midcap and the smallcap stocks witnessed selling pressure. As a result, the BSE Midcap and the BSE Smallcap indices underperformed the larger peers and were down between 5-8% on a weekly basis. All the sectoral indices ended the week in the red with multiple indices seeing a weekly fall in excess of 6%", added Chouhan
Per Chouhan, in the coming weeks, key events that will determine the market's course of action include the US elections and the US FOMC meet. Stock specific action will continue based on Q2FY25 financial performance and management commentary.
Garg also anticipates that in the near term, the markets will trade rangebound. Market veteran Raamdeo Agrawal, who heads Motilal Oswal Financial Services, called the ongoing market downturn the "healthiest possible correction".
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