The Indian equity markets continued their downward trend in early trading on Friday, following a sharp decline the previous day. The ongoing foreign fund outflows and escalating tensions in the Middle East have contributed to the bearish sentiment among investors.
Indices Continue to Slide
The BSE Sensex fell by 354.67 points, settling at 82,142.43, marking its fifth consecutive day of losses. Similarly, the NSE Nifty dropped by 114.1 points to reach 25,136. The decline reflects growing investor concerns and market volatility influenced by global events.
Among the 30 Sensex constituents, several key companies experienced significant losses. Bajaj Finance, Asian Paints, NTPC, UltraTech Cement, State Bank of India, and Bajaj Finserv emerged as the primary laggards in the market. Conversely, HCL Technologies, IndusInd Bank, and Tata Consultancy Services were among the few firms that registered gains during this tumultuous trading session.
Foreign Fund Outflows
Data from the exchanges revealed that Foreign Institutional Investors (FIIs) offloaded equities worth ₹15,243.27 crore on Thursday alone. This marked a continuation of a worrying trend, as FIIs have been actively withdrawing capital from the Indian markets.
“The last three days have witnessed huge FII selling of ₹30,614 crore in the cash market. FIIs are moving money from expensive India to cheap Hong Kong on expectations that the monetary and fiscal stimulus being implemented by the Chinese authorities will stimulate the Chinese economy and improve earnings of Chinese companies,” explained V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. He noted that this shift in investment strategy underscores the fragility of the current market sentiment.
Global Market Impact
Asian markets displayed mixed performances, with Seoul, Tokyo, and Hong Kong trading positively. However, the mainland Chinese markets remained closed for a holiday. In contrast, the US markets closed lower on Thursday, reflecting a cautious approach by investors amid global uncertainties.
Prashanth Tapse, Senior VP of Research at Mehta Equities Ltd, pointed out that “In yesterday’s session, FIIs were net sellers, offloading ₹15,243 crore, as Nifty faced a sharp sell-off due to fragile market sentiment, sensitive to news from the Middle East.” This highlights the direct impact of geopolitical tensions on market performance.
Oil Prices and Market Reactions
On the commodities front, the global oil benchmark Brent crude saw a slight decline of 0.06% to USD 77.57 per barrel. This marks the fourth consecutive session of falling prices, which may influence inflationary trends and investor sentiment.
During the previous trading session, the BSE benchmark had experienced a significant tumble, plunging 1,769.19 points or 2.10% to close at 82,497.10. During intraday trading, it had fallen as much as 1,832.27 points, indicating heightened volatility and investor anxiety.
The Nifty index mirrored this trend, slumping by 546.80 points or 2.12% to finish at 25,250.10.
