Indian Markets Tumble: Sensex and Nifty Hit Multi-Month Lows Amid Economic Concerns

Indian stock indices, Sensex and Nifty, hit multi-month lows due to weak earnings and rising inflation, with major sectors falling. Driven by foreign outflows and Q2 earnings concerns, the markets suffered steep losses. Experts advise caution amidst volatility and rich valuations, projecting challenges for sectors like cement and metals.

For the fifth consecutive day, India's benchmark stock indices have seen a downturn, hitting multi-month lows, driven by various economic factors. Among these are weak second quarter earnings, ongoing foreign fund outflows, and escalating domestic inflation concerns.

The Sensex dropped to 77,691 points, marking a decline of 984 points or 1.25%, while the Nifty ended at 23,559 points, a fall of 324 points or 1.36%. All major sectoral indices were entrenched in the red. According to ICRA Analytics, markets opened positively but quickly fell due to a sector-wide sell-off exacerbated by a rising dollar index and persistent foreign outflows.

Post U.S. elections, domestic matters remain the primary focus for the Indian stock markets, particularly foreign fund flows, the conclusion of the Q2 earnings season, and inflation patterns. India's retail inflation rose to 6.21% in October, surpassing the Reserve Bank of India's 6% threshold. November has already seen foreign portfolio investors offload stocks worth Rs 23,911 crore, following an October high of Rs 94,017 crore, as confirmed by National Securities Depository Limited.

Adding to the volatility, the Trump election victory has stirred market unpredictability, as highlighted by VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services. Investors are advised to approach sectors like cement, metals, and petroleum with caution due to slowing growth, while considering potential opportunities in banking, digital firms, hotels, pharma, and IT. As the markets correct, experts note a rising investor caution amid high valuations and macroeconomic uncertainties, with both Nifty and Sensex falling to their lowest levels in five months, according to Vikram Kasat, Head of Advisory at PL Capital - Prabhudas Lilladher.

(With inputs from agencies.)