Mid-day Mood | Sensex, Nifty sink as profit-taking hits Indian stocks; India VIX up 8%

The India VIX, a gauge of market volatility, increased by nearly 8 percent, signaling heightened uncertainty among investors.

Sensex and Nifty extended their losses around noon on September 30 as the Indian shares stumbled as profit-taking swept through the market, particularly hitting the banking and energy sectors.

Nifty 50 slipped below the 26,000 mark today. Before the decline that began in the previous session, Nifty and Sensex witnessed a robust six-session rally that saw gains of over 3 percent due to the outsized US interest rate cut which bolstered expectations of more foreign inflows. A lack of major triggers prompted investors to cash in on recent gains.

At 11.20 AM, the Sensex was down 830 points or 1 percent at 84,741 and the Nifty was down 243 points at 25,935. About 1,357 shares advanced, 2,018 shares declined, and 147 shares remained unchanged.

The broader market faced selling pressure, though not as severe as the benchmarks. The BSE Midcap index declined by 0.4 percent, while the Smallcap index fell by 0.2 percent. The India VIX, a gauge of market volatility, increased by nearly 8 percent, signalling heightened uncertainty among investors.

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Investors are now looking ahead to the monthly auto sales data set for October 1, as well as the upcoming Q2 FY25 earnings season, which will begin next month.

Sectoral Trend

Excluding Nifty Metal, all 12 sectoral indices were in the red, with Nifty Bank, Pharma, Energy, Auto, and Realty each down by 1-2%.

According to a Motilal Oswal research report, demand trends for automobiles remained weak across segments in September, despite the festive seasons of Ganesh and Onam. The inauspicious Shraddh period further impacted sales, resulting in a year-on-year decline in retail sales across categories.

In contrast, the metal index rose for the eighth consecutive session, driven by a spike in iron ore prices and China's efforts to revive its struggling property sector.

Fundamental View

"Market is likely to move into a consolidation phase in the near-term," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. He said that the outperformance of the Chinese stocks has been triggered by hopes of a revival in the Chinese economy in response to the monetary and fiscal stimulus announced by the Chinese authorities. "This means FIIs may continue to sell in India and move some more money to better-performing markets."

However, Vijayakumar does not expect FII selling to impact the Indian market significantly since the massive domestic money can easily absorb whatever the FIIs are selling.

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Technical View

"After a series of upticks, Nifty seems to have taken a breather," said Deepak Jasani, Head of Retail Research at HDFC Securities. "Nifty could now face resistance from the 26,250-26,475 band on the upside, while 25,849 could offer support in the near term."

Key Nifty gainers

JSW Steel, Tata Steel, Hindalco, Asian Paints, Britannia

Key Nifty losers

Hero MotoCorp, M&M, Bharat Electronics, Bajaj Auto

Key Sensex gainers

JSW Steel, Tata Steel, Asian Paints, HCLTech, NTPC

Key Sensex losers

M&M, ICICI Bank, Tech Mahindra, Axis Bank

Stock moves

Bajaj Steel Industries: Share price hit a fresh 52-week high as the board of the company is likely to meet this week to consider bonus issues to the shareholders.

Two-wheelers: Shares of major two-wheeler manufacturers, including Bajaj Auto and Hero MotoCorp, declined 2-4 percent following UBS's projection of a subdued impact from the early festive season, compounded by the inauspicious 'Shradh Paksha' period from September 17 to October 2. 

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