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- Published: November 8, 2024 10:16
Mumbai: In a challenging start to Friday’s trading session, Indian stock markets experienced a significant downturn as investors reacted to mounting global uncertainties and continued foreign institutional investor (FII) outflows.
The Sensex dropped 377.73 points to 79,164.55 at the opening, while the Nifty declined by 121.30 points to 24,078.05. With only eight companies advancing and forty-two declining within the Nifty 50, the market reflected broad-based pressure, as sectors across the board saw a pullback.
The global market sentiment remains tense, affected by multiple factors, including the aftermath of the US Presidential election, anticipation of further stimulus from China, and new geopolitical concerns in the Middle East.
In the Nifty 50 index, only 8 companies recorded gains, whereas 42 saw declines. Leading the gainers were Infosys, Apollo Hospitals, Wipro, Tech Mahindra, and Hindalco. On the other hand, BPCL, Reliance, Coal India, Tata Motors, and Maruti emerged as top losers.
Ajay Bagga, a banking and marketing expert, attributed the market’s slide to a mix of global and domestic factors.
“The US Presidential Election is done, the Fed rate cut is done, and China’s NPC session ends today with expectations of further stimulus. However, geopolitical risks are rising, with reports of Iran preparing for potential strikes on Israel. Additionally, the US has deployed F15 fighters to the Middle East. The markets are reacting to the Trump 2.0 outlook and are now mean-reverting,” Bagga noted.
He highlighted the persistent foreign institutional investor (FII) outflows, which reached Rs 16,000 crore in the first week of November alone.
“While domestic institutional investors (DIIs) can invest around Rs 50,000 crore monthly, the high level of FII sales continues to weigh on Indian markets, especially with a strong US dollar and high US Treasury yields,” Bagga added.
He pointed to government spending and seasonal consumption as potential positives but said that, for now, the market remains “range-bound and constrained by continuous FII selling.”
Akshay Chinchalkar, Head of Research at Axis Securities, provided a technical outlook, noting the bearish trend in the Nifty.
“The Nifty traced a bearish engulfing pattern yesterday, falling 1.2 per cent with nine declining stocks for each one that rose. The 24,541 – 24,560 range is a significant resistance level, and unless Nifty breaks past it with 23,800 as support, the market is likely to continue this choppy range,” Chinchalkar explained.
He added that derivatives data suggests a continued bearish sentiment for the near term.
