Indian Markets Tumble Amid FII Sell-Off and Earnings Concerns

The Indian equity markets experienced a fourth consecutive day of declines as indices BSE Sensex and NSE Nifty50 closed in the red on Tuesday. Losses primarily in banking, auto, and financial sectors, alongside foreign fund outflows and weak earnings, drove the dip. Certain stocks, nonetheless, showed resistance.

The Indian equity indices, notably the BSE Sensex and NSE Nifty50, closed negatively on Tuesday, marking the fourth consecutive day of market declines. The downturn was predominantly led by losses in banking, automotive, and financial sector stocks amidst concerns over weak earnings performance and significant outflows from foreign investors.

BSE Sensex ended the day with a decline of 820.97 points, closing at 78,675.18, while NSE Nifty closed 257.85 points lower at 23,883.45, with both indices recording a drop of over one per cent. Heavy market movers such as Britannia, Bharat Electronics, NTPC, Asian Paints, and HDFC Bank contributed to the decline, though some stocks managed to post gains, including Trent, Sun Pharma, Infosys, and HCL Tech.

Market analysts suggest that persistent selling by foreign institutional investors (FIIs) and weak quarterly earnings from key sectors, especially automotive and financial services, are exerting downward pressure. V K Vijayakumar of Geojit Financial Services notes that while FII activities have favored bearish trends, domestic institutional investors (DIIs) have offered some support. Despite recent economic growth, macroeconomic challenges, including the depreciation of the rupee and disappointing corporate earnings, have fueled fund withdrawals from secondary markets. Additional pressure arises from the strengthening dollar, driven by aggressive economic policies. Investors now await retail inflation data to gauge future trends.

(With inputs from agencies.)