Mid-day Update | Sensex, Nifty Surrender Early Gains as Broader Market Selling Intensifies
The broader market faced sharper declines, with the BSE Midcap and Smallcap indices falling over 1% each as investors remained cautious in a volatile environment.
Sensex and Nifty Updates
After a subdued start on October 22, the Sensex and Nifty lost ground as selling pressure intensified across the broader market. The auto and metal sectors led the downturn, each falling over 1%, pulling the Nifty 50 into negative territory.
By 11:50 AM, the Sensex had dropped 408 points (0.5%) to 80,742, while the Nifty was down 140 points (0.6%) at 24,640. Only 555 shares advanced, while 2,795 shares declined, and 70 remained unchanged.
The Indian benchmarks have struggled to hold gains, pressured by weak earnings, consistent Foreign Institutional Investor (FII) selling, and global market uncertainty stemming from the ongoing Middle East conflict.
The broader market saw steeper losses, with the BSE Midcap and Smallcap indices declining by 1.5% and 2.5%, respectively, as volatility spooked investors. Meanwhile, the India VIX, or fear gauge, rose over 3% to 14.2.
Foreign Institutional Investors have been steadily withdrawing funds from Indian equities, redirecting capital to China, where recent stimulus measures and attractive valuations have drawn attention. FIIs have been net sellers throughout October.
Sectoral indices painted a bleak picture, with nearly all in the red. Nifty Realty was the worst performer, sinking nearly 3%, and all constituent stocks trading in negative territory. Nifty Auto, Nifty Energy, Nifty Metal, and Nifty Private Bank also saw declines ranging between 1% and 2.5%.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, commented, "Market corrections are inevitable when valuations are elevated, and the current trigger has been the sustained FII selling."
From a technical standpoint, Sameet Chavan, Head of Technical and Derivative Research at Angel One, noted that Nifty remains in a consolidation phase, but a drop below 24,600 could spark a deeper correction, while 25,250 acts as critical resistance.
Key gainers on the Nifty included ICICI Bank, Shriram Finance, and Nestle, while Tata Motors, Tata Steel, and M&M led the losers. Similarly, ICICI Bank, Nestle, and Bharti Airtel gained on the Sensex, with Tata Motors, Tata Steel, and IndusInd Bank among the major laggards.
Stock highlights included One 97 Communications, which fell nearly 5% after posting Q2 earnings, and Bajaj Housing Finance, which surged 4% following strong quarterly results.
