The benchmark equity indices fell sharply on Friday, tracking weak trends in global markets and sustained foreign fund outflows, as investors took to profit booking amid cautious sentiment.
Sensex declined 513.68 points or 0.62 percent to 82,797.33 at around 10:30 a.m., while the broader Nifty fell to 25,356.30, down 153.40 points or 0.6 percent.
Bharti Airtel, HCL Technologies and Tech Mahindra were among the major laggards in the Nifty50 pack, declining up to 4 percent, while Adani Enterprises and Shriram Finance were top gainers, rising up to 2 percent.
Key factors behind market decline
1) Weak global cues: In Asian markets, South Korea’s Kospi, Japan’s Nikkei 225 and Hong Kong’s Hang Seng indices traded sharply lower, while Shanghai’s SSE Composite was marginally down. Overnight, US markets ended significantly lower, dragged by a sell-off in technology and artificial intelligence-related shares amid concerns over an ongoing US government shutdown.
2) Persistent FII selling: FIIs sold equities worth Rs 3,263.21 crore on Thursday, marking the seventh straight session of outflows since October 29. Continuous foreign selling has been a key drag on sentiment in recent days, analysts noted.
"The success of the FII strategy of sustained selling in India and moving money to cheaper markets has emboldened them to continue the strategy and continue shorting the market. Short covering can lead to trend reversal but there are no immediate triggers for that in sight. But markets have an uncanny ability to surprise," V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.
3) Crude rises: Brent crude, the global oil benchmark, rose 0.3 percent to USD 63.57 per barrel. Higher crude prices generally weigh on India’s trade balance and inflation outlook.
4) Profit booking: Indian equities are seeing profit-taking amid persistent foreign outflows, offsetting the impact of an improving corporate earnings outlook and expectations of progress in India–U.S. trade talks.
"Sentiment has turned fragile due to profit booking, persistent pessimism and sustained foreign outflows," said Prashanth Tapse, Senior Vice President (Research), Mehta Equities Ltd. "Concerns over a possible delay in US rate cuts due to rising services inflation have further dampened mood, offsetting optimism around the India–US trade talks," he added.
5) Rupee declines: The rupee declined 3 paise to 88.66 against the US dollar as the American currency strengthened and foreign investors kept on withdrawing funds from the Indian capital market. According to forex traders, the Indian rupee was also weighed down amid intense selling in domestic equity markets and upward movement in crude oil prices in the overseas market.
Technical analysis
On the technical front, Anand James, Chief Market Strategist at Geojit Financial Services, said the Nifty’s inability to hold above the 25,630–25,650 zone after early gains has exposed the 50-day simple moving average near 25,200 and the lower Bollinger Band level at 25,088. "The 25,400 region may offer a chance for bulls to regroup," he added.
(PTI Inputs)
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
