Bears Cripple D-Street; Sensex Declines for Third-Straight Day, Nifty Slips Below 23,400

The Indian benchmark indices couldn't keep pace with their early gains as they tumbled in red for the third consecutive trading session. The bear attack can be attributed to fall in 12 sectoral indices wherein losses in public sector banks and metals played the spoilsport. However, the IT sector was in high spirits as TCS reported strong Q3 results.

Global market cues also remained in the spotlight as Asian equities and US futures tumbled ahead of jobs data that will set the tone for the Federal Reserve’s outlook on the interest rate trajectory.

As of 10 am, Sensex tumbled by 450.92 points or 0.58 percent at 77,169.29 while Nifty was down 159.20 points or 0.68 percent at 23,367.30. Close to 505 shares gained and 2,597 shares were in red.

Ruchit Jain, Vice President of Technical Research at Motilal Oswal told Moneycontrol, “The recent market sell-off is primarily driven by persistent foreign institutional investor (FII) selling, which continues to show no signs of reversal. This pressure is compounded by a rising dollar index, which is weakening the rupee and adding to the market's downward trend.”

As mid and small cap companies are set to report their quarterly earnings, any blips in the financial results may aggravate the selling activity, Jain added.

TCS shares surged by 4% to become the top gainer on the Nifty after reporting stellar Q3 results. While the total contract stood at $10.2 billion, CLSA upgraded the stock to 'outperform' and raised its price target to ₹4,546.

Meanwhile, Metal and PSU Bank indices fell by 0.5 percent each. PSU Bank lost their sheen for the fourth consecutive session as Q3 results fell short of expectations. FMCG, Infra, and Oil & Gas indices also dipped by 0.3%.

Losses ballooned by 1.8% and 2.4% for mid-small cap indices as negative sentiment continues to cause jitters in the market forces.

Tata Elxsi plunged by 7% today after the company reported disappointing results in the December quarter, thereby missing street estimates. Morgan Stanley downgraded the stock to an "underweight" rating and reduced their target price to ₹6,000 apiece.

Chandan Taparia, Head of Equity Derivatives at Motilal Oswal said, “Nifty is maintaining a sell-on-bounce trend, with every minor recovery being met with selling. On the weekly chart, the index formed an inside bar while the daily chart shows a lower high structure for the last four sessions suggesting further weakness.”

He added, “The FII long-short ratio is stable near 19 percent for the last four trading sessions, signals selling pressure at a higher zone and buying near the support zone. Based on the current price structure as long as Nifty trades below the 23800 zone index can witness down move towards the 23,333 zone.”

Shares of TCS, Tech Mahindra, Wipro, Infosys, and HCL Tech were the top gainers, Shriram Finance, IndusInd Bank, Adani Enterprises, Bharat Electronics, and NTPC are having a tough time.