MUMBAI: Benchmark indices Sensex and Nifty edged lower on Thursday, extending their losing streak to the fourth consecutive day due to selling in FMCG and auto shares following disappointing earnings and continued FII outflows.
In lacklustre trade, the BSE Sensex slipped 16.82 points or 0.02 per cent to settle at 80,065.16. During the day, the benchmark hit a high of 80,259.82 and a low of 79,813.02, gyrating 446.8 points. The NSE Nifty skidded 36.10 points or 0.15 per cent to 24,399.40 in a volatile session.
From the 30 Sensex pack, Hindustan Unilever fell nearly 6 per cent after the FMCG major reported a 2.33 per cent decline in consolidated net profit at Rs2,595 crore for the second quarter ended September 2024, impacted by moderation in demand from the urban market. Nestle, ITC, Maruti, Asian Paints, Infosys, Tata Consultancy Services, Larsen & Toubro, and HCL Technologies were also among the significant laggards.
Major gainers
In contrast, UltraTech Cement, Mahindra & Mahindra, Titan, Adani Ports, State Bank of India, and Power Grid saw gains.
“Despite persistent selloffs by FIIs, the benchmark indices recorded only a minor loss, as India’s October PMI data continues to indicate healthy growth, which also supports the RBI’s growth guidelines for FY25,” said Vinod Nair, Head of Research at Geojit Financial Services. “The broader market exhibited a mixed response due to valuation corrections in sectors such as PSUs and banking & financials. Meanwhile, the FMCG sector faced declines attributed to delayed demand recovery and margin pressures,” he added.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs5,684.63 crore on Wednesday, according to exchange data. Domestic Institutional Investors (DIIs) purchased equities worth Rs6,039.90 crore.
The major headwind the market faces now is the massive, unprecedented, and sustained FII selling, which has reached Rs93,088 crore through October 23, according to NSDL data.
FII outflow
The fundamental trigger for the FII outflows is the elevated valuations in India compared with the relatively cheap and attractive valuations in markets like China and Hong Kong.
“An uptrend in the market is not compatible with a downtrend in earnings growth, leading to selling at every rise, turning the near-term market structure into ‘sell on rally,'” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Ajit Mishra, SVP of Research at Religare Broking Ltd, mentioned that stock markets remained subdued on the weekly expiry day, ending largely flat amid mixed signals. The BSE smallcap gauge declined 0.72 per cent, while midcap dipped by 0.13 per cent.
Among sectoral indices, the BSE FMCG sector tanked 2.66 per cent. Realty fell 1.21 per cent, telecommunications 1.02 per cent, IT 0.64 per cent, and industrials 0.62 per cent also saw declines, while healthcare, bankex, power, commodities, energy, and utilities posted gains.
Other Asian markets
A total of 2,349 stocks declined, while 1,584 advanced, and 100 remained unchanged on the BSE. In Asian markets, Seoul, Shanghai, and Hong Kong settled lower, while Tokyo ended higher. European markets were trading in positive territory, whereas US markets closed negatively on Wednesday.
Global oil benchmark Brent crude jumped 1.99 per cent to $6.45 a barrel. The BSE benchmark declined 138.74 points or 0.17 per cent to settle at 80,081.98 on Wednesday, with the Nifty going lower by 36.60 points or 0.15 per cent to 24,435.50.
