Equity benchmarks extended their losses on Monday, with the Nifty50 sliding below 23,400 levels in early trade, as technology and healthcare stocks faced selling pressure amid weak global cues and concerns over delayed interest rate cuts in the US.
The Sensex opened higher at 77,863.54 from its previous close of 77,580.31 but has declined sharply, trading at 77,034.10 as of 9.45 AM, down by 546.21 points or 0.70 per cent.
Likewise, the Nifty opened at 23,605.30 compared to its previous close of 23,532.70 and is currently at 23,370.20, losing 162.50 points or 0.69 per cent continuing their six-session losing streak.
Dr Reddy’s Laboratories led the losses, dropping 3.26 per cent, followed by IT majors Infosys (-2.39 per cent), Wipro (-2.24 per cent), and HCL Technologies (-1.73 per cent). Apollo Hospitals Enterprise declined 2.02 per cent. On the flip side, Hero MotoCorp surged 3.96 per cent, while Hindalco gained 3.46 per cent. HDFC Bank, Bajaj Finance, and Coal India advanced between 0.87 per cent and 1.22 per cent.
“The truncated trading week was dominated by bears. This correction phase, the steepest in four years post-pandemic, has seen prices decline over 10 per cent from all-time highs without any significant interim bounce,” said Sameet Chavan, Head Research, Technical and Derivative at Angel One.
The market sentiment remained bearish as Foreign Institutional Investors (FIIs) continued their selling spree, offloading ₹1,849.87 crore worth of equities on Friday. However, Domestic Institutional Investors (DIIs) provided some support with net purchases of ₹2,481.81 crore.
“The headwinds from geopolitical conflicts, geoeconomic fragmentation, commodity price volatility and climate change continue to grow,” cautioned RBI Governor Shaktikanta Das, highlighting ongoing global challenges.
The metal sector showed resilience despite the broader market weakness. Notably, CLSA has raised India’s allocation to a 20 per cent overweight while reducing exposure to China, citing India’s stable economic conditions and robust foreign flows waiting on the sidelines.
“The Indian economy is in a sweet spot, with a mix of solid growth and moderating inflation,” Moody’s Ratings said, forecasting 7.2 per cent GDP growth in the 2024 calendar year.
In the broader market, trading volumes remained subdued, with cash market volumes on the NSE near 6-month lows. The market’s technical indicators suggested continued weakness, with the Relative Strength Index (RSI) for the Nifty at 43.26.
“Technically, on the weekly chart, it has formed a long bearish candle and on the daily chart, it is maintaining a lower top formation, which is largely negative,” noted Shrikant Chouhan, Head Equity Research, Kotak Securities.
The decline in Indian markets aligned with global trends, as US markets experienced their worst week since early September. The shift in rate cut expectations following Federal Reserve Chair Jerome Powell’s comments and strong US retail sales data impacted market sentiment worldwide.
In commodities, gold found support at ₹73,880-73,750 despite recent pressure, while crude oil remained volatile with support at ₹5,600-5,560 levels, according to Rahul Kalantri, VP Commodities at Mehta Equities.
“While a technical rebound and relief rally cannot be dismissed, the markets remain susceptible to continued selling pressure,” warned Ameya Ranadive, Senior Technical Analyst at StoxBox, suggesting immediate support for Nifty at 23,480-23,350-23,250 levels.