Indian equities continued their downward trend for the fifth consecutive session on Wednesday, with major indices closing significantly lower as concerns over macroeconomic challenges and foreign fund outflows weighed on sentiment. The BSE Sensex dropped 984 points, or 1.25 percent, to close at 77,690, while the NSE Nifty declined by 324 points, or 1.36 percent, to end at 23,559, both touching multi-month lows.
This week alone, the Sensex has lost 1,795 points, or 2.26 percent, while the Nifty has shed 589 points, or 2.44 percent. Among the biggest losers on the Nifty were Hero MotoCorp, Hindalco, Tata Steel, Mahindra & Mahindra, and Eicher Motors. Gainers included NTPC, Britannia Industries, Hindustan Unilever, and Tata Motors.
Sectoral indices all ended in the red, with auto, capital goods, metals, realty, PSU banks, power, and media sectors dropping between 2 to 3 percent. The BSE Midcap index declined by 2.5 percent, while the Smallcap index fell 3 percent.
With the U.S. elections concluded, Indian market focus has shifted back to domestic factors such as foreign fund inflows, the final phase of the Q2 earnings season, and inflationary trends. India’s retail inflation climbed to 6.21 percent in October, surpassing the Reserve Bank of India’s upper tolerance threshold of 6 percent.
Foreign Portfolio Investors (FPIs) have continued to withdraw from Indian markets. November alone has seen net sales of Rs 23,911 crore in equities, following a record Rs 94,017 crore in October, the highest monthly outflow ever, as per National Securities Depository Limited (NSDL) data.
The Trump victory has added an element of high volatility to markets, said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
“Investors should be cautious in investing in sectors like cement, metals and petroleum refining which are facing growth slowdown. Safety is sectors like banking, new age digital companies, hotels, pharma and IT where growth prospects are good,” said Vijayakumar.
“The correction reflects investors’ growing caution amid rich valuations and macroeconomic uncertainties, with both Nifty and Sensex falling to their respective five-month lows today,” said Vikram Kasat, Head – Advisory, PL Capital – Prabhudas Lilladher.