Sensex, Nifty Fall for Fourth Day on Weak Global Cues & FII Selling

The Indian stock market continued its downward trend for a fourth straight day on Wednesday, as persistent selling pressure wiped out nearly ₹3 lakh crore of investor wealth in a single session.

The 30-share BSE Sensex tumbled 386 points, or 0.47%, to close at 81,715.63. The broader NSE Nifty 50 index fell by 113 points, or 0.45%, to settle at 25,056.90. The negative sentiment was widespread, with the BSE Midcap and Smallcap indices also declining by 0.85% and 0.50%, respectively.

Key Factors Driving the Market Decline

A combination of global and domestic factors is currently weighing on investor sentiment. Here’s a breakdown of the key reasons behind the sustained sell-off:

• Weak Global Cues: European markets traded in the red, reacting to mixed signals from US Federal Reserve Chair Jerome Powell regarding future interest rate cuts, who emphasized the ongoing need to manage inflation.
• Foreign Investor Outflows: Foreign Institutional Investors (FIIs) continued their selling spree. Concerns over India’s relatively high valuations and a moderation in corporate earnings growth are prompting them to withdraw funds from the market.
• Profit Booking: Following a period of optimism after recent policy reforms, investors are now booking profits. The market’s focus has shifted back to fundamentals like valuations and the upcoming quarterly earnings season.
• Sector-Specific Weakness: The Nifty Realty index was the hardest hit, plunging by 2.49%. Other major sectors like Auto, Private Bank, and IT also faced significant selling pressure. The only silver lining was the Nifty FMCG index, which managed to close with a marginal gain of 0.18%.

Market Highlights: Top Gainers and Losers

While most stocks ended lower, a few managed to resist the trend. Power Grid Corporation, Hindustan Unilever (HUL), and NTPC were among the top gainers on the Nifty 50.

On the losing side, Tata Motors was the biggest casualty, falling by 2.62%. It was joined by other heavyweights like Bharat Electronics (BEL), Jio Financial Services, and Adani Enterprises.

The overall market breadth was overwhelmingly negative. On the BSE, 2,565 stocks declined, while only 1,602 advanced, indicating widespread selling pressure.

Investor Outlook: Key Levels and Triggers

Market experts are advising a cautious approach. The Nifty 50 has settled near a crucial support level of around 25,050. According to technical analysts, a decisive move below this could lead to a further slide towards the 24,900 level.

Investors should monitor the following:

• Key Support Levels: Watch the 25,000 and 24,900 levels for the Nifty 50. A breach of these supports could signal further weakness.
• Global Market Trends: The direction of global markets, particularly in the US, will remain a key influencer.
• FII Activity: Tracking the flow of foreign institutional investment is crucial. A reduction in selling could provide some relief to the market.
• Upcoming Earnings Season: The second-quarter earnings will be the next major domestic trigger. Corporate results and management commentary will be closely watched for signs of an earnings recovery.

For now, the market remains in a corrective phase. Investors are advised to remain cautious and focus on quality stocks with strong fundamentals.

This article is for informational purposes only and should not be considered investment advice. Please conduct your own research before making any investment decisions.