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Informist, Monday, Oct. 7, 2024

By Alina Geogy

MUMBAI – Headline equity indices extended losses for the sixth consecutive session Monday, falling to a one-month low, owing to losses in index heavyweights, outflow of foreign investment, and persistent worries over the ongoing conflict in West Asia. The market breadth widened further and was skewed towards the bears, with nearly 85% of all NSE-traded stocks ending with losses, while only 13% ended with gains. The broader market indices underperformed benchmark ones, falling to their lowest levels in at least a month.

The ongoing correction in the market was long awaited, especially after the rally seen in the last few weeks, Astha Jain, senior research analyst at Hem Securities, said. There is nervousness ahead of the corporate earnings for the September quarter, as market participants are not very optimistic that companies would post strong earnings growth, she said. Outflows from the domestic market to China are further hurting investor sentiment, she said.

Benchmark indices had opened higher as investors tracked positive cues from global markets, particularly after the latest monthly employment data from the US indicated a strong pick-up in the pace of hiring last month. However, the indices failed to sustain these gains and fell as much as 1.7% from intraday highs. The Nifty 50 ended at 24795.75 points, down 0.9%, while the Sensex ended at 81050 points, down 0.8%.

The Nifty 50 attempted some recovery in the last hour of trade, but a further northward journey would have been possible only if it closed above 25100 points, Jain said. However, losses owing to these negative factors will be restricted to the near term, and the market may resume its northward journey soon, as the fundamentals are good, she said.

Losses in shares of heavyweights such as Reliance Industries and HDFC Bank contributed the most to the decline in the Nifty 50. Only 10 of the 50 stocks in the Sensex ended higher. Shares of banks and oil and gas firms weighed on the index.

Barring the Nifty IT index, all sectoral indices ended lower. The Nifty Media and Nifty PSU Bank indices fell over 3% each and were the worst hit sectoral indices. The Nifty IT index extended gains from the previous session and ended nearly 1% higher, with nine of its 10 constituents ending higher. Information technology stocks gained after stronger than expected non-farm payrolls data from the US for September, which eased concerns of an impending recession in the US.

The Nifty Media, Nifty Auto, and Nifty Metal fell for the third straight session, while the Nifty Energy and Nifty Oil & Gas were down for the fifth consecutive session. The Nifty Bank fell for the sixth day in a row. Among the broader market indices, the Nifty Smallcap 250 index ended nearly 3% lower and was the worst hit. India VIX, the market's fear gauge, rose nearly 7% and ended at a near one-month high of 15.08.

Among specific stocks, shares of Titan Co. hit a one-month low and ended over 2% lower as investors were likely to have priced in slightly weaker margins for Jul-Sept after the company reported low growth in the studded-jewellery segment in its quarterly update. Shares of Vodafone Idea fell over 6% after the Department of Telecommunications issued a notice to the company for not submitting bank guarantees for dues for spectrum acquired before 2022, as per a report by The Economic Times.

Shares of CG Power and Industrial Solutions, AU Small Finance Bank, and Macrotech Developers were among the best performing Nifty 200 constituents. CG Power's stock gained 5.6% after the company signed an agreement to acquire the radio frequency components business of Renesas Electronics America and other affiliate entities of Renesas Electronics Corp. Shares of AU Small Finance Bank gained 2% and broke a three-day losing streak after strong growth in loans and deposits for Jul-Sept, as per a provisional quarterly update.

Shares of Macrotech Developers snapped a six-day losing streak and rose as much as 4% during the day after the company posted a strong quarterly update for Jul-Sept. "Overall, we are pleasantly surprised that the company was able to record an operationally strong quarter in a period where industry report on the real estate market suggests relatively weaker sales," Nomura Global Markets Research said.

* Of the Nifty 50 stocks, 10 rose and 40 fell

* Of the Sensex stocks, 8 rose and 22 fell

* On the NSE, 384 stocks rose, 2,490 fell, and 63 were unchanged

* On the BSE, 636 stocks rose, 3,422 fell, and 120 were unchanged

* Nifty Media: down 3.7%; Nifty PSU Bank: down 3.3%; Nifty IT: up 0.7%

BSE                                               NSE

Sensex: 81050, down 638.45 points or 0.78%        Nifty 50: 24795.75, down 218.85 points or 0.87%

End

Edited by Avishek Dutta

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