This week, Sensex and Nifty logged their most significant weekly fall since June 2022, ending a three-week gaining streak. The markets saw BSE-listed companies erase nearly ₹18 lakh crore in market capitalization. All sectoral indices, except Nifty Metal, closed lower, with Nifty Realty sliding 8%. A majority of Nifty stocks ended in losses, with RIL, Shriram Finance, and Hero MotoCorp leading the declines. Midcap stocks also witnessed losses, with Edelweiss Financial, Godrej, and M&M Finance being the top losers.
Indices in Red Amid Global Concerns
On October 4, Sensex and Nifty ended in the red for the fifth consecutive session, influenced by escalating tensions in the Middle East. Sensex closed down 808 points (1%) at 81,688, while Nifty declined by 200 points (0.8%) to 25,049. Throughout the week, Nifty fell by 4.3% and Sensex by 4.5%, marking their steepest weekly drop since mid-2022. The market breadth remained weak, with 1,521 shares advancing, 2,266 declining, and 101 remaining unchanged.
Concerns over the Middle East conflict have spurred fears of disruptions in crude oil supplies from the top-producing region, leading to a price hike. Brent Crude futures have risen over 9% in October, now trading at more than $78 per barrel, posing challenges for net importers like India.
Foreign Investors Move Away from India
Foreign Institutional Investors (FIIs) have been shifting their focus to China, which has recently introduced economic stimulus measures. Over the past three days, FIIs have offloaded ₹30,614 crore in the Indian cash market. This shift is evidenced by China-dedicated funds attracting inflows of over $13 billion in a week, compared to the $107 million seen by India-dedicated funds, as reported by Cameron Brandt, Director of Research at EPFR Global.
Sectoral Performance and Broader Market Trends
Both Nifty Bank and Nifty FMCG fell for the fifth consecutive session, dropping 0.6% and 1.6%, respectively. ICICI Bank and HDFC Bank led the decline in the banking sector, while ITC and HUL weighed on the FMCG index.
Bucking the overall market trend, Nifty IT rose by 0.5%, with gains in Infosys and Tech Mahindra driving the rise. As Indian IT firms gear up to report their September quarter earnings, analysts predict neutral to positive outcomes, influenced by Accenture’s recent performance.
Market Volatility and Key Movers
The India VIX, an indicator of market volatility, surged by over 7% to 14. On the Nifty 50, top losers included M&M, Bajaj Finance, Asian Paints, Nestle, and BPCL, which dropped between 2-4%. Meanwhile, top gainers were Infosys, ONGC, HDFC Life, Tata Motors, and Wipro, which climbed by 0.7-1.5%.
Investors are now focusing on the US nonfarm payrolls report for September, which is due for release later in the day, to gauge potential market impact.
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