Indian Markets Brace for Corporate Earnings Amid Global Fund Outflows

Indian investors shift focus to upcoming corporate earnings and US economic data for market direction. Despite heavy foreign outflows, domestic investors offer strong support. Key banking results and mixed sectoral performances mark the landscape, as indices show resilience, highlighting important local investor contributions.

As investors face a lack of major stock market triggers, attention is turning to corporate quarterly earnings and pivotal US economic data, starting Monday. Analysts indicate banking giants such as HDFC Bank and Kotak Bank will significantly impact investor reactions, alongside second-quarter results from ITC, Hindustan Unilever, ICICI Bank, BPCL, HPCL, and Ultratech Cement.

Despite ongoing positivity in US markets, Indian markets remain largely unresponsive due to continuous foreign fund outflows, a trend likely to continue. Ajit Mishra, Religare Broking Ltd.'s SVP of Research, emphasized that changes in fund flow patterns will be closely monitored. Meanwhile, Pantomath Capital Advisors highlighted investors' anticipation of further US economic data, especially regarding Federal Reserve rate cut indications.

Pressure mounted on Indian stock markets for a third consecutive week, experiencing a near-half percent decline. While initial signs of recovery emerged, persistent FII selling and a weak earnings season start dampened sentiment, resulting in a negative bias. A late recovery in banking majors cushioned some losses, yet Nifty and Sensex closed lower at 24,854.05 and 81,224.7, respectively.

Sectoral performance was varied, with banking, financials, and realty sectors making gains, whereas auto, metals, and FMCG sectors led the losses. This trend mirrored broader indices, as the midcap index dropped nearly a percent, while smallcap managed slight positivity.

Foreign investors continued to sell Indian equities this week, albeit at a slower rate than the previous week, per National Securities Depository Limited (NSDL) data. Between October 14 and 18, Foreign Portfolio Investors offloaded Rs19,065.79 crore in equities, significantly down from Rs31,568.03 crore the week before. Despite the heavy sell-off, indices like Nifty 50 and Sensex showed resilience, supported by robust domestic investor participation. October data from the National Stock Exchange (NSE) reveals Domestic Institutional Investors injected Rs74,176.20 crore into the market, easing FII pressures and averting further downturn.

This interplay of foreign outflows and strong domestic participation underscores the pivotal role of local investors in stabilizing the Indian stock market amid significant global investor selling pressure. (ANI)

(With inputs from agencies.)