Indian equity indices ended on a weak note with Nifty below 24,500 on October 22. At close, the Sensex was down 930.55 points or 1.15 percent at 80,220.72, and the Nifty was down 309.00 points or 1.25 percent at 24,472.10. About 553 shares advanced, 3,264 shares declined, and 72 shares remained unchanged.
Adani Enterprises, M&M, Bharat Electronics, Coal India, and Tata Steel were among the top losers on the Nifty while gainers included ICICI Bank, Nestle India, and Infosys. All the sectoral indices ended in the red with auto, capital goods, metal, power, realty, telecom, media, and PSU banks down 2-3 percent. The BSE Midcap index shed 2.5 percent and the Smallcap index declined 3.8 percent.
Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas, said, “Despite opening in the green, the Nifty saw intensified selling pressure as the day progressed. The index closed down ~309 points, decisively below the 20-week average (24,718), indicating weakness. Daily and hourly momentum indicators suggest further downside, with support expected around 24,000.
Sensex sees significant decline
Resistance is seen between 24,900 and 25,000.”
Prashanth Tapse, Senior VP (Research) at Mehta Equities, commented, “There has been no respite from FIIs selling, which has led to uncertainty among domestic investors. Foreign investors are fleeing Indian equities to invest in cheaper locations such as China, especially after the Chinese government’s stimulus announcement.
Vinod Nair, Head of Research at Geojit Financial Services, added, “Bearish sentiment continues to dominate the domestic market amid heightened volatility, with small and midcap stocks taking the biggest hit.
The recent sharp rise in US bond yields signifies diminished expectations for aggressive rate cuts by the US Fed. In the short term, this bearish outlook may persist, although the RBI’s latest bulletin upholds India’s GDP growth forecast of 7.2% for FY25.
In earnings news, Persistent Systems reported a 5.8% increase in rupee revenue for Q2 at Rs 2,897 crore versus Rs 2,737 crore quarter-on-quarter, while Zomato’s Q2 net profit rose significantly to Rs 176 crore from Rs 36 crore year-on-year. The Indian rupee ended flat at 84.07 per dollar on Tuesday, compared to Monday’s close of 84.06.
The overall bearish trend is exacerbated by persistent selling in mid and small-cap segments. Despite oversold conditions suggesting a possible short-term bounce, the upside appears capped at 24,670. On the downside, the index is approaching its support zone of 24,370-24,430.
The bearish sentiment and heightened volatility in the market are expected to continue in the short term, influenced by global economic factors and investor behavior.
