In a continuation of the recent downward trend, Indian stock markets closed sharply lower on Monday, October 7, 2024, marking the sixth consecutive session of losses.
The BSE Sensex tumbled 638.45 points or 0.78 per cent to close at 81,050, while the Nifty 50 plunged 218.85 points or 0.87 per cent to end at 24,795.75.
The sell-off was broad-based, with declines outnumbering advances by a significant margin. Out of 4,178 stocks traded, 3,420 declined, while only 638 advanced, and 120 remained unchanged. The market’s weakness was further evidenced by 678 stocks hitting their lower circuit limits, compared to 228 touching upper circuits.
Sector-wise, all major indices except IT faced selling pressure. Nifty Media and Nifty PSU Bank were among the hardest hit. The Nifty Bank index fell 983.15 points or 1.91 per cent to close at 50,478.90, while Nifty Financial Services dropped 400.70 points or 1.70 per cent to 23,221.10.
Among the BSE Sensex stocks, M&M emerged as the top performer, rising 1.46 per cent to close at ₹3,061.15, followed by ITC with a 1.40 per cent gain at ₹510.50. Bharti Airtel advanced 1.31 per cent to ₹1,662.25, while Infosys and Bajaj Finance added 0.80 per cent and 0.74 per cent, closing at ₹1,933.75 and ₹7,263.30, respectively.
On the losing side, Adani Ports fell sharply by 4.17 per cent to ₹1,354.10, and NTPC declined 3.50 per cent to ₹415.10. SBI and Power Grid dropped 3.36 per cent and 2.92 per cent, respectively, while IndusInd Bank ended 2.43 per cent lower at ₹1,349.30.
Among individual stocks, Adani Ports was the biggest loser on both Nifty and Sensex, plummeting 4.29 per cent and 4.17 per cent respectively. Other major losers included BEL (-3.54 per cent), Adani Enterprises (-3.20 per cent), Coal India (-3.18 per cent), and NTPC (-3.10 per cent).
On the flip side, Trent led the gainers, rising 1.86 per cent, followed by M&M (1.48 per cent), Bharti Airtel (1.32 per cent), ITC (1.28 per cent), and Bajaj Finance (0.67 per cent).
Shrikant Chouhan, Head of Equity Research at Kotak Securities, commented on the market’s technical aspects, stating, “...the larger market texture is weak but due to temporary oversold conditions, we could see non-directional activity in the near future.” He identified key support levels at 24700/80700 and 24650/80500, with resistance at 25000/81800 and 25050/82000.
Ameya Ranadive, Sr. Technical Analyst at StoxBox, attributed the decline to “heightened tensions in the Middle East and subdued quarterly earnings, which dampened investor sentiment.” He also noted that foreign investors were withdrawing funds from Indian markets, shifting focus to more affordable markets like China and Hong Kong.
Deepak Jasani, Head of Retail Research at HDFC Securities, observed, “Nifty fell for the sixth consecutive session and ended at over one month low on Oct 07. It recorded the worst 6-day fall since March 2022.” He added, “The trend of the Nifty remains weak and sell-on-rise behaviour may be witnessed for some more time, although as the short term trend has become oversold, a bounce can be expected any time.”
Foreign institutional investors (FIIs) were net sellers with a total sell value of ₹24,421.74 crore, resulting in a net outflow of ₹9,896.95 crore. In contrast, domestic institutional investors (DIIs) recorded a net buying activity, purchasing stocks worth ₹20,286.53 crore and selling stocks worth ₹11,381.45 crore, leaving a net inflow of ₹8,905.08 crore.
Additionally, proprietary traders were net buyers with a net inflow of ₹51.53 crore, while clients and NRIs saw net outflows of ₹421.17 crore and ₹41.79 crore, respectively.
Narendra Solanki from Anand Rathi Shares and Stock Brokers highlighted the impact of geopolitical tensions, stating, “The escalating tensions between Iran and Israel have introduced a level of uncertainty and risk that investors find difficult to ignore. Any potential military conflict in the region could disrupt global oil supplies and increase volatility in energy markets, which in turn impacts broader financial markets.”
Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, pointed out the breaking of key technical levels, saying, “The positive chart pattern like higher tops and bottoms on the daily chart seems to have negated by Nifty moving below the last higher bottom of 24753 levels on Monday.”
As the market continues to grapple with multiple headwinds, investors remain cautious, with many adopting a wait-and-watch approach amid the ongoing volatility and geopolitical uncertainties.