The Indian stock market endured a turbulent ride this week, with benchmark indices NIFTY and SENSEX plunging to over a seven-week low. The downturn was fueled by a combination of global cues, rising bond yields, profit booking, and relentless selling by Foreign Institutional Investors (FIIs).
Monday: Investor Wealth Wiped Out
The week began on a grim note, with panic selling gripping the markets. SENSEX nosedived by 1,258 points, while NIFTY50 shed 388 points, or 1.6%, closing at the 23,600 level. The crash wiped out nearly ₹11 lakh crore in investor wealth. The bearish sentiment was triggered by concerns over the rising cases of the HMPV virus in China and weak quarterly updates from the banking sector.
FIIs Continue to Dump Indian Equities
FIIs sold shares worth more than Rs 16,800 crore during the week, exacerbating the market decline. Despite occasional attempts at recovery, persistent outflows kept market sentiment subdued.
Brief Respite on Tuesday
Amid value buying and easing virus concerns, markets saw a modest recovery on Tuesday. SENSEX rebounded by 234.12 points to close above the 78,000 mark, while NIFTY added 91 points to end at 23,700. However, this relief rally was short-lived.
Mid-Week Volatility
Wednesday brought more volatility, with investors turning cautious ahead of IT giant TCS's quarterly results. A downward revision of India’s GDP growth forecast to 6.4% for FY25 added to the jittery sentiment. By Thursday, surging US bond yields and continued FII selling dragged the indices lower once again. SENSEX dropped 528.28 points, closing below the 78,000 level, while NIFTY lost 162.45 points to end at 23,526.5.
Friday Blues
Despite positive momentum in IT stocks following stellar results from TCS, broader market sentiment remained weak on Friday. Rising crude oil prices and a strong US dollar dampened investor confidence. SENSEX ended the day down 241.3 points, while NIFTY slipped by 95 points to close at 23,431.5.
Sectoral Performance
Except for NIFTY IT, which gained 2% on the back of robust TCS results, all sectoral indices closed in the red. PSU Banks and Realty were the hardest hit, tanking 8% each. Consumer durables and media stocks fell 6%, while metals, auto, pharma, and oil & gas shares recorded losses of up to 5%.
IT Sector Defies Downtrend
TCS led the charge in the IT space, reporting a 12% year-on-year rise in net profit for Q3FY25, with a 5.6% increase in revenue. A weaker rupee also contributed to the upbeat earnings. Shares of other IT majors, including Infosys, Tech Mahindra, and LTIM, rallied by up to 6%. Every week, the NIFTY IT index rose by 2%, offering a silver lining amid the broader market gloom.
Adani Group Stocks Under Pressure
Adani Wilmar shares plummeted 10% on Friday after reports surfaced about the Adani Group’s plan to sell a 20% stake in the company via an Offer-For-Sale (OFS) to raise ₹7,148 crore. The stock hit its lower circuit limit at Rs 291.1 apiece. Other Adani stocks, including Adani Enterprises, Adani Green Energy, Adani Power, and Adani Energy Solutions, also faced selling pressure, declining up to 4%.
Midcaps and Smallcaps Suffer
The broader market experienced sharp losses, with NIFTY Midcap indices tumbling up to 6% and Smallcap indices sinking up to 7%. Investor sentiment remained fragile amid concerns over earnings and macroeconomic headwinds.
Looking ahead, the focus will shift to the upcoming Q3 earnings reports from major players such as HCL Tech, Axis Bank, Infosys, Kotak Mahindra Bank, and Tech Mahindra. Additionally, macroeconomic data on inflation and industrial production will be closely watched. On the global front, key indicators from the US labour market and inflation trends could influence FII flows and impact market direction.
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