Sensex, Nifty fall after a flat open; metals, FMCG weigh heavy on benchmarks

The Nifty has now corrected 7 percent from its record high of 26,277 reached in late September.

Indian shares opened flat on October 24 and fell thereafter pressured by continued foreign outflows and a lacklustre Q2FY25 earnings. While FMCG and metal stocks weighed on the Nifty, the banking sector saw renewed buying interest after a three-day slide.

At 9.40 AM, the Sensex was down 142 points or 0.2 percent at 79,939, and the Nifty was down 67 points or 0.3 percent at 24,368. About 1,294 shares advanced, 1,576 shares declined, and 98 shares remained unchanged.

The Nifty has now corrected 7 percent from its record high of 26,277 reached in late September. Several headwinds continue to weigh on market sentiment—disappointing Q2 earnings, relentless selling by Foreign Institutional Investors (FIIs), escalating geopolitical tensions in the Middle East, uncertainty over the pace of US interest rate cuts, the looming US election, and surging US bond yields.

"If the market corrects by another 3-4 percent, adding to the current 7 percent drop, we could see a healthy 10 percent correction, which might then trigger a recovery," said Ajit Mishra, SVP of Research, Religare Broking.

Follow our live blog for all the market action

On October 23, FIIs remained net sellers for the 18th consecutive session, redirecting funds to China, attracted by its stimulus measures and more favourable valuations. FIIs have sold Indian equities worth Rs 92,143 crore so far in October, while Domestic Institutional Investors (DIIs) have been net buyers, picking up shares worth Rs 89,311 crore.

Mishra expects the correction to persist with the next key support for Nifty 50 at 24,000, and intraday support at 24,350. "If we break that level, 24,100 could come into play, especially as it's expiry day. If 24,350 holds, we might see a flat or marginally positive close around 24,500," he said.

Nifty FMCG dropped nearly 2 percent, led by declines in HUL and ITC. Hindustan Unilever slid nearly 4 percent after posting weaker-than-expected Q2 profits, impacted by an urban market slowdown and rising costs. ITC shares also traded in the red ahead of its Q2FY25 results due later in the day.

Also Read | As Hyundai drives into Dalal Street, meet the i-bankers behind India's biggest IPO

Similarly, the Metal index shed over 1 percent, with Hindalco and Vedanta leading the losses. Shares of Hindalco dropped nearly 7 percent following a sharp 28 percent decline in Constellium SE's stock. Constellium reported lower third-quarter profit and revenue due to weakening demand across multiple end markets and disruptions caused by flooding at its Swiss facilities. Constellium SE, a Paris-based global manufacturer, specialises in aluminium rolled products, extruded products, and structural parts made from advanced alloys.

Constellium also experienced a softening demand in automotives, which is the most profitable segment for Novelis, a subsidiary of Hindalco.

In the broader market, both BSE Midcap and BSE Smallcap were up 0.3 percent. Analysts said that if the market continues to slide, mid-cap and small-cap stocks could experience sharper declines.

In Nifty 50, HDFC Bank, Cipla, HCLTech, Coal India, and Bharat Electronics were the top gainers, rising 0.5-1 percent while Hindalco, HUL, SBI Life, Bharti Airtel, and Britannia were the worst hit falling 1-7 percent.

Asian markets traded mixed, while Wall Street closed lower overnight, weighed down by rising Treasury yields and investor caution ahead of the US presidential election.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.