Sensex, Nifty dive for fifth straight session as broader sell-off deepens

Nifty Bank, Auto, Energy, Metal, PSU Bank, Realty, and Media were among the worst-hit sectors, each down by 2-3 percent.

The Sensex and Nifty ended lower for the fifth session in a row amid heavy foreign institutional selling, disappointing Q2 earnings, and global uncertainties. Apart from Nifty FMCG and Nifty Healthcare, the remaining 11 sectoral indices were deep in the red.

Earnings of IndusInd Bank also dampened the market mood. Shares of the private lender plunged over 19 percent after its Q2FY25 net profit dropped 40 percent year-on-year to Rs 1,331 crore, missing estimates due to a sharp rise in loan loss provisions.

At close, the Sensex was down 490 points or 0.6 percent at 79,575 and the Nifty was down 188 points or 0.8 percent at 24,211. The Sensex slid 2.5 percent this week, while the Nifty tumbled 3 percent, as both indices closed in the red every day this week. Both indices are now down 8 percent from their all-time highs.

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"We have seen a sharp sell-off mainly due to FII selling, with no signs of a trend reversal. Momentum readings on technical charts indicate that the market is currently in an oversold zone," said Ruchit Jain, Lead Research Analyst at 5Paisa. Jain added that the market is in a sell-on-rise mode for the short term, with pullback moves likely to be sold into.

Nifty Bank, Auto, Energy, Metal, PSU Bank, Realty, and Media were among the worst-hit sectors, each down by 2-3 percent.

In the broader market, the BSE Midcap fell by 1.5 percent, and the Smallcap index by 2.4 percent. Both of them have dropped 9 percent and 10 percent, respectively, from their all-time highs.

The India VIX, or the volatility index, rose over 6 percent to nearly 15.

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Market experts are advising investors to avoid mid-cap and small-cap stocks, which may face further corrections due to valuations not aligning with earnings growth. "We recommend avoiding mid-cap and small-cap stocks for now, focusing instead on selective large-cap names, possibly from the IT sector, which appears better positioned than other sectors," Jain said.

"Q2 results have shown a slowdown in consumer sectors, including autos and FMCG, where sluggish demand, rising competition, and high input costs have impacted margins," said Krishna Appala, Senior Research Analyst at Capitalmind Research.

On the Nifty 50, IndusInd Bank, Adani Enterprises, BPCL, Shriram Finance, and Coal India led the losses, tumbling 4-19 percent, while ITC, Axis Bank, Bharat Electronics, Britannia, and HUL stood as the day's top gainers, gaining 1-2 percent.

ITC's shares rose over 2 percent and emerged as the top gainer on the Nifty 50 following an impressive Q2 performance, driven by strong growth in cigarette volumes and booming hotel business.

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