The bears' onslaught on Dalal Street extended to the sixth session on October 26 amid rising US bond yield and worsening situation over the conflict between Hamas and Israel. Most indices were down over a percent however, smallcap index saw a smart recovery but still closed lower.
Investors were left poorer by Rs 2.95 lakh crore as their wealth reflected by the total market cap of BSE-listed companies slipped to Rs 306.27 lakh crore. In the last six sessions, investors have lost Rs 17.50 lakh crore.
The 50-share NSE Nifty fell 264.90 points or 1.39 percent to 18,857.25. BSE flagship Sensex plunged 1.41 percent or 900.91 points to 63,148.15.
Market experts point out that weak earnings performance by India Inc. and high volatility due to expiry of monthly futures and options (F&O) contracts also hit the market hard.
"Till date, the actual domestic Q2 results are below par in comparison to the excited earnings forecasted. Similar disappointments are visible in developed economies," said Vinod Nair, Head of Research at Geojit Financial Services.
"Downgrade in earnings and valuation is arising due to risk of further slowdown of the economy due to geopolitical and elevated interest rates. Also selling pressure intensified due to expiry-led volatility influencing investors to stay cautious."
Stocks and sectors
Broader markets bled as well. Nifty Midcap was down 1.16 percent. Nifty Smallcap saw some recovery from day’s low and ended down 0.34 percent. Nifty 500, the broadest index in the market, dropped 1.23 percent.
All sectoral indices closed with cuts. Nifty Metal was the biggest loser, down 1.62 percent. Nifty Financial Services, Nifty Oil & Gas, Nifty Healthcare and Media were other losers.
Among the Nifty, Axis Bank, Adani Ports, Power Grid and HCL Tech were the gainers of the day. Mahindra & Mahindra was the biggest loser, down about 4 percent. Bajaj Finance, Asian Paints and UPL were other top losers.
Outlook for Oct 27
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services
Tensions in the Middle East, coupled with sticky US Treasury yields at around 5 percent, triggered risk-off sentiment. Further mixed Q2 results, continued FIIs selling, rising oil price and near record high USDINR to above 83, have also dented the investor sentiments. Given the global uncertainties, there could be higher volatility in the near term and thus giving long term investors an opportunity to accumulate quality stocks at lower levels. We suggest making higher allocation towards large caps as valuations are comfortable along with steady growth prospects.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd
In the backdrop of weak global cues, investors shunned local equities at will on the monthly F&O expiry day with benchmark Nifty closing below the crucial 19k mark amid sell-off in frontline banking, automobile and IT stocks. Investors are worried about the simmering West Asia conflict, economic uncertainty and rate hike woes, and hence maintained their bearish stance for the sixth straight session.
Technically, a bearish candle on daily charts and weak intraday formation is indicating further weakness from the current levels. As long as the index is trading below 19000, the weak sentiment is likely to continue till 18800-18725 levels. On the flip side, one relief rally is possible only after the dismissal of 19000 and above the same, the index could move up till 19100-19150.
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