Sensex and Nifty on track for 8th straight weekly loss since 2001
- The Indian stock market extended its downward spiral on Thursday, with benchmark indices Sensex and Nifty sliding into negative territory for the fourth consecutive session.
- At approximately 10:00 am on Thursday, the Sensex fell over 100 points to trade below the 72,350 mark, while the Nifty 50 dropped more than 50 points to...
- The sustained downward pressure on Dalal Street stems largely from heavy selling by Foreign Institutional Investors (FIIs).
The Indian stock market extended its downward spiral on Thursday, with benchmark indices Sensex and Nifty sliding into negative territory for the fourth consecutive session. According to a report by economictimes.indiatimes.com, the market is currently on track to record its eighth straight week of losses, marking the first such persistent weekly losing streak since 2001 and surpassing the seven-week downturn seen during the Covid-19 crash.
Sensex Drops Below 72,350 and Nifty Slips Under 22,550
At approximately 10:00 am on Thursday, the Sensex fell over 100 points to trade below the 72,350 mark, while the Nifty 50 dropped more than 50 points to slip beneath the 22,550 level. Broader market indicators mirrored the weak sentiment, with the Nifty Midcap 100 and Nifty Smallcap 100 indices declining by up to 0.7%. Market breadth heavily favored bears across the National Stock Exchange, which recorded 2,148 declining stocks against 916 advances, while 121 stocks remained unchanged.
Sectoral performance showed sharp divergences, led by a steep decline in the Nifty Auto index, which plunged more than 2% to rank as the top sector loser. Heavyweight losses on the Sensex were driven by UltraTech Cement, Eternal, and Mahindra & Mahindra (M&M), all of which dropped over 2%. Conversely, Kotak Mahindra Bank shares jumped nearly 4% following the appointment of a new CEO. Select IT and banking equities provided mild support, with Infosys, HCL Tech, TCS, HDFC Bank, and Axis Bank gaining roughly 1% each, while Nifty Private Bank and Nifty IT indices each rose by nearly 1%.
Foreign Institutional Investor Sell-Off Intensifies Amid Rising US Bond Yields
The sustained downward pressure on Dalal Street stems largely from heavy selling by Foreign Institutional Investors (FIIs). VK Vijayakumar, Chief Investment Strategist at Geojit Investments, noted that FII selling intensified significantly during the preceding two trading days, with institutional investors offloading equities totaling Rs 20,128 crore. Vijayakumar cautioned that rising US 10-year bond yields, which climbed to 5.3%, could encourage continued FII capital outflows from Indian equities.
Data highlighted an apparent contradiction in foreign institutional activity. While FIIs withdrew Rs 45,536 crore through stock exchanges during September, they deployed Rs 9,676 crore into the primary market and selectively purchased expensive mid-cap and small-cap stocks. Vijayakumar attributed this bifurcated behavior to the strength in US bond yields and anticipated near-term weakness in Indian large-caps. Despite the ongoing correction, Vijayakumar characterized the downturn as a short-term phase, pointing out that Brent crude oil prices sliding below $98 offer potential relief and suggesting that investors utilize the weakness to accumulate high-quality large-cap growth stocks.
Nifty Remains Below 22,800 Threshold
Technical indicators point to a subdued market undertone while the Nifty remains below the 22,800 threshold, according to Hemang Gor, Senior Research Analyst for Derivatives and Technical Research at Axis Direct. Gor identified immediate support for the benchmark index at 22,500, noting that a breakdown below this level could expose the index to 22,400. Financial market observers also noted that the Nifty recently cracked below its critical 200-week moving average for the first time since Covid. Technical analysts suggest that a durable easing of crude oil prices or US Treasury yields is necessary for the index to reclaim 22,800 and target a recovery toward 23,000.