Indian Stock Market Nosedives: Highlights and Future Outlook

Indian stock indices continued their downward trend on Monday, reaching multi-month lows. Sensex and Nifty both recorded declines, impacted by slowing earnings growth and inflation. Experts suggest caution despite the oversold market, hinting at potential quick recovery rallies.

On Monday, India's benchmark stock indices plunged further, marking their seventh consecutive session of losses and hitting new multi-month lows. The Sensex concluded at 77,339.01, a drop of 241.30 points or 0.31%, while the Nifty finished at 23,453.80, down by 78.90 points or 0.34%. Sectoral analysis revealed that Nifty IT, media, and oil and gas bore the brunt of the losses, whereas metals, PSU banks, and realty showed resilience, according to NSE figures.

Vinod Nair, Head of Research at Geojit Financial Services, attributed the market volatility to ongoing consolidation, subdued earnings growth, and a weakening rupee pressured by inflation. "IT stocks faced headwinds due to diminished anticipation of a Federal Reserve rate cut in December, possibly delaying BFSI sector spending," he noted. The prolonged decline was influenced by disappointing Q2 earnings, consistent foreign fund flows, and escalating inflationary pressures at both retail and wholesale levels.

Shrikant Chouhan, Head of Equity Research at Kotak Securities, expressed that the current market conditions appear weak but oversold, signaling a potential quick pullback rally might be on the horizon. Ajit Mishra, SVP of Research at Religare Broking, advised investors to adopt a cautious approach towards the indices while seeking selective stock-specific opportunities for investment.

Notably, the Indian stock markets were closed last Friday in observance of Guru Nanak Dev Jayanti. (ANI)

(With inputs from agencies.)