Indian equity markets faced a significant setback as the Sensex and Nifty closed lower for the eighth consecutive session, marking the longest losing streak in two years. The Sensex dropped by 199.76 points, or 0.26 percent, to end at 75,939.21, while the Nifty 50 fell by 102.15 points, or 0.44 percent, to close at 22,929.25. This decline was fueled by persistent foreign fund outflows and concerns over potential U.S. tariffs, causing a ripple effect across the broader market.
Market Turmoil and Investor Sentiment
The Indian equity markets continued their downward spiral, with the Nifty Midcap Select plummeting by 269.85 points, or 2.38 percent, to 11,090.05 and the Nifty Next 50 seeing a decline of 1,389.80 points, or 2.28 percent, to 59,557.95. Banking stocks were also under pressure, with the Nifty Bank index dropping by 260.40 points, or 0.53 percent, to 49,099.45. The market breadth reflected overwhelming negativity, as 3,320 stocks declined against only 681 advances on the BSE, with 82 remaining unchanged. Notably, 641 stocks hit their 52-week lows, showcasing the depth of the ongoing correction.
Defensive stocks showed relative resilience during this turbulent period, with top gainers including Britannia, ICICI Bank, Nestlé India, Infosys, and HCL Tech. On the flip side, Adani Ports, BEL, Adani Enterprises, Trent, and Grasim were among the worst performers. This tumultuous week in the market has left investors reeling, overshadowing any positive momentum built up in recent weeks.
Expert Insights and Technical Analysis
The market’s weakness has been attributed to various factors, including lower-than-expected corporate earnings, particularly for mid- and small-cap companies. Vinod Nair, Head of Research at Geojit Financial Services, highlighted the muted earnings trend and the depreciation of the Indian Rupee, coupled with external factors like tariffs, contributing to the weakened sentiments in the market.
Technical analysts like Rupak De from LKP Securities observed that the Nifty struggled under a bear attack, closing below the 23,000 mark. Despite some recovery from its lows, the index continued to trade below a critical short-term moving average, indicating ongoing challenges in the market. The Indian Rupee showed some resilience, strengthening against the U.S. dollar, supported by positive global cues and lower CPI numbers in India.
Looking ahead, market experts urge caution, emphasizing the need to monitor key support levels closely. Amol Athawale from Kotak Securities warned of a potential slip in the market if the support zone is breached, while Ameya Ranadive from StoxBox highlighted the significance of certain support levels in the current market environment. With global and domestic uncertainties looming, staying cautious and avoiding aggressive investments is advisable to navigate the challenging market conditions.
As investors grapple with the volatile market conditions, the short-term outlook remains uncertain. Global developments are expected to play a crucial role in shaping market sentiment, with caution being the watchword for investors in the coming days and weeks. The market’s resilience and recovery depend on a delicate balance of domestic and global factors, making it imperative for stakeholders to stay informed and agile in their investment decisions.
