Sensex bleeds as FPIs pull out staggering ₹85,790 crore in October: NSDL data

The Sensex closed below the 80,000 mark on Friday, falling 663 points amid a wave of weak corporate earnings and heavy selling by foreign investors. This downturn, led by a steep 18% drop in IndusInd Bank shares, reflects disappointing Q2 results. IndusInd reported a 39% drop in net profit for the quarter ending September 30, 2024, making it the session's biggest loser.

Foreign portfolio investors (FPIs) offloaded stocks worth over ₹3,000 crore on Friday alone, contributing to a staggering ₹85,790 crore in outflows for October, per NSDL data. Analysts attribute the selloff to India's high market valuations and investor shifts to more reasonably priced markets like China, where government policies are focused on economic growth.

Weak corporate earnings have compounded concerns over India’s valuation levels. Many analysts say the focus is now on selective stocks, with upcoming events like the U.S. Presidential elections and the Federal Reserve meeting next month likely to influence market direction.

During Friday’s session, the BSE Sensex fell 662.87 points to close at 79,402.29, reaching an intraday low of 79,137.98. The Nifty also took a hit, dropping 218.60 points to 24,180.80. Besides IndusInd Bank, major Sensex losers included Mahindra & Mahindra, Larsen & Toubro, NTPC, Adani Ports, Tata Steel, Maruti, Bajaj Finance, and Titan, each declining up to 3.93%. Conversely, ITC climbed over 2% after posting a 1.8% rise in consolidated net profit. Axis Bank, Hindustan Unilever, Sun Pharma, and ICICI Bank were other gainers.

The broader market also suffered; the BSE midcap index declined by 1.48% while the small-cap index dropped 2.44%.

"The correction in Indian equities is due to intense foreign institutional selling driven by high valuations and China's growing appeal," stated Santosh Meena, head of research at Swastika Investmart. He noted that weak earnings, especially in the consumption sector, signal an economic slowdown, impacting financial stocks and triggering retail and HNI selling. "A market bounce is overdue but requires easing FPI selling pressure and improved local sentiment," added Deepak Jasani, head of retail research at HDFC Securities.