Indian equity benchmarks closed lower on Thursday, dragged down by heavy selling in technology stocks, with the BSE Sensex falling 553.12 points and the NSE Nifty declining by 135.50 points amid weak global cues and monthly derivatives expiry.

The 30-share BSE Sensex ended at 79,389.06, down 0.69 per cent, while the broader NSE Nifty closed at 24,205.35, dropping 0.56 per cent. The decline in Indian markets aligned with global trends as investors processed warnings from tech giants Meta Platforms and Microsoft about rising AI costs.

IT stocks led the market decline, with sector majors recording significant losses. HCL Technologies emerged as the biggest loser, falling 3.61 per cent, followed by Tech Mahindra (-3.58 per cent), TCS (-2.68 per cent), Infosys (-2.17 per cent). Asian Paints also joined the losers’ list, declining 2.35 per cent.

However, some stocks bucked the trend, with Cipla leading the gainers, surging 9.50 per cent. Other notable gainers included Larsen & Toubro (6.23 per cent), ONGC (2.04 per cent), Dr. Reddy’s Laboratories (1.93 per cent), and Mahindra & Mahindra (1.61 per cent).

L&T led the gainers among Sensex stocks, surging 6.38 per cent to ₹3,624.40, followed by Power Grid (+0.86 per cent) and JSW Steel (+0.76 per cent). Mahindra & Mahindra also rose by 0.71 per cent, while HDFC Bank remained flat. Among the losers, Tech Mahindra saw the largest decline at 4.54 per cent, followed by HCL Tech (-3.89 per cent) and TCS (-2.80 per cent). Infosys and Asian Paints also dropped by 2.48 per cent and 1.97 per cent, respectively.

The broader market showed mixed trends, with the NIFTY MIDCAP SELECT falling 0.84 per cent to 12,343.15, while small-cap stocks displayed resilience. The market breadth remained positive, with 2,652 stocks advancing, against 1,264 declines on the BSE. Notably, 167 stocks hit their 52-week highs, while 23 touched their 52-week lows.

“The key benchmark indices traded with mild cuts while experiencing a broader sell-off in the technology sector due to weakness in the US IT companies, which has led the domestic IT companies to come under the shadow of underperformance,” said Vinod Nair, Head of Research at Geojit Financial Services. He added, “Investors remain cautious owing to weak domestic earnings for Q2. However, the market expects the momentum to reverse in H2 due to a rebound in core sector data and government spending.”

The banking sector also faced pressure, with the Nifty Bank index declining 0.64 per cent to close at 51,475.35. The NIFTY FINANCIAL SERVICES index dropped 0.63 per cent to end at 23,886.55.

Deepak Jasani, Head of Retail Research at HDFC Securities, noted, “Cash market volumes have remained steady over the last few days, suggesting no great conviction on either side by participants.” He identified the Nifty’s support level at 23,893, with resistance in the 24,492-24,567 band over the near term.

The market’s performance came against the backdrop of steady trading volumes and the approaching US elections next Tuesday. The India VIX, a volatility indicator, settled at 15.57, up 0.35 per cent, suggesting relatively stable market conditions despite the day’s decline.

FIIs/FPIs exhibited a strong selling stance in the capital market segment, with a significant net outflow of ₹4,613.65 crore. DIIs maintained a positive momentum, recording a substantial net inflow of ₹4,518.28 crore. Among other investor categories, clients showed a positive net inflow of ₹175.35 crore, while NRIs recorded a minor inflow of ₹0.80 crore. Proprietary traders contributed with a net inflow of ₹288.34 crore.

Technical analysts observed the formation of a red candle on Nifty’s daily chart, indicating potential weakness. Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates Ltd., pointed out that “Nifty has been consolidating between 24,000 and 24,500 for the past few sessions. A breakout on either side of this range could set the next direction.”

Published on October 31, 2024