Indian benchmark indices Sensex and Nifty50 opened lower for the fourth consecutive session on Friday, weighed down by auto, banking and IT stocks, amid foreign fund outflows and disappointing results from marquee companies.
The BSE Sensex was trading 580 points, or 0.72%, lower at 80,427. The Nifty50 was down 172 points, or 0.7%, trading at 24,577 around 9:30 am.
The disappointing start to the earnings season continued on Thursday after top IT services providers Infosys and Wipro gave revenue forecasts that missed analysts' expectations, suggesting a broad-based IT recovery was yet to take hold.
From the Sensex stocks, Maruti, Infosys, Titan, M&M, Nestle India, Reliance Industries, and HDFC Bank were the top laggards, falling 1% to 2.3%. On the other hand, only Axis Bank, TCS, Tata Motors, HCL Tech, and Sun Pharma opened with cuts.
Axis Bank was the top Sensex gainer in early trade after the private lender reported an 18% increase in standalone net profit, reaching Rs 6,918 crore, compared to Rs 5,864 crore in the same quarter of the previous financial year.
Meanwhile, Manappuram Finance shares opened with a 10% lower circuit after the RBI imposed restrictions on 4 NBFCs (including Manappuram) citing material supervisory concerns, following which, the stock earned multiple rating downgrades or target price cuts from various brokerage firms.
On the sectoral front, all indices were in the red, with Nifty FMCG, Media, Metal, Realty, Consumer Durables, and Oil & Gas opening over 1% lower. Nifty Bank, Auto, Financial Services, IT, and Pharma also opened lower.
Experts View
"The high valuations in India has been the main trigger for the sustained selling by FIIs, and recent developments like consensus downward revision of FY25 earnings estimates to below 10% and Bajaj Auto’s concerns regarding weak demand during the festive season dampened the sentiments resulting in big selling in auto stocks," said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
"Trends indicate that FII selling and DII buying is likely to continue. A bounce back is likely in the next two or three days but it is unlikely to sustain since sentiments have turned weak. Investors may wait and watch for the market to stabilise and slowly accumulate largecaps like leading private sector banks beaten down by FII selling. ICICI Bank and HDFC Bank have the potential to give decent returns in the medium-term," Vijayakumar said.
Hardik Matalia, Derivative Analyst at Choice Broking, said, "After a negative opening, Nifty can find support at 24,600 followed by 24,500 and 24,400. On the higher side, 24,800 can be an immediate resistance, followed by 24,850 and 24,950."
Global Markets
China stocks rose on Friday as the central bank officially launched a swap facility aimed at boosting the equity market, although shares elsewhere in Asia were mixed in the wake of data confirming a slowdown in the world's second-largest economy.
Hong Kong's Hang Seng traded 1.14% higher, getting an additional lift from technology shares following solid earnings a day earlier at Taiwanese chipmaker and Nvidia supplier TSMC. Taiwan's equity benchmark climbed 2.62%. Japan's Nikkei added 0.38%, helped by a weaker yen versus the dollar.
Overnight, data showed U.S. retail sales rose a stronger-than-expected 0.4% last month after an unrevised 0.1% gain in August. A separate report showed initial jobless claims dropped by 19,000 to a seasonally adjusted 241,000 last week.
FII/DII Tracker
The foreign institutional investors (FIIs) offloaded equities worth Rs 7,421 crore on October 17, while domestic institutional investors purchased equities worth Rs 4,979 crore on the same day.
Crude Oil
Crude oil futures steadied on Friday after strong US retail sales data, but Chinese economic indicators remained mixed and prices were headed for their biggest weekly loss in more than a month on concerns about demand.
Brent crude futures gained 8 cents, or 0.1%, to $74.53 a barrel, while US West Texas Intermediate crude was at $70.82 a barrel, up 15 cents, or 0.2%.
Currency Watch
The Indian rupee fell 1 paisa to 84.07 against the US dollar in early trade. The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, declined 0.13% to 103.69 level.
(With inputs from agencies)
The BSE Sensex was trading 580 points, or 0.72%, lower at 80,427. The Nifty50 was down 172 points, or 0.7%, trading at 24,577 around 9:30 am.
The disappointing start to the earnings season continued on Thursday after top IT services providers Infosys and Wipro gave revenue forecasts that missed analysts' expectations, suggesting a broad-based IT recovery was yet to take hold.
From the Sensex stocks, Maruti, Infosys, Titan, M&M, Nestle India, Reliance Industries, and HDFC Bank were the top laggards, falling 1% to 2.3%. On the other hand, only Axis Bank, TCS, Tata Motors, HCL Tech, and Sun Pharma opened with cuts.
Axis Bank was the top Sensex gainer in early trade after the private lender reported an 18% increase in standalone net profit, reaching Rs 6,918 crore, compared to Rs 5,864 crore in the same quarter of the previous financial year.
Meanwhile, Manappuram Finance shares opened with a 10% lower circuit after the RBI imposed restrictions on 4 NBFCs (including Manappuram) citing material supervisory concerns, following which, the stock earned multiple rating downgrades or target price cuts from various brokerage firms.
On the sectoral front, all indices were in the red, with Nifty FMCG, Media, Metal, Realty, Consumer Durables, and Oil & Gas opening over 1% lower. Nifty Bank, Auto, Financial Services, IT, and Pharma also opened lower.
Experts View
"The high valuations in India has been the main trigger for the sustained selling by FIIs, and recent developments like consensus downward revision of FY25 earnings estimates to below 10% and Bajaj Auto’s concerns regarding weak demand during the festive season dampened the sentiments resulting in big selling in auto stocks," said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
"Trends indicate that FII selling and DII buying is likely to continue. A bounce back is likely in the next two or three days but it is unlikely to sustain since sentiments have turned weak. Investors may wait and watch for the market to stabilise and slowly accumulate largecaps like leading private sector banks beaten down by FII selling. ICICI Bank and HDFC Bank have the potential to give decent returns in the medium-term," Vijayakumar said.
Hardik Matalia, Derivative Analyst at Choice Broking, said, "After a negative opening, Nifty can find support at 24,600 followed by 24,500 and 24,400. On the higher side, 24,800 can be an immediate resistance, followed by 24,850 and 24,950."
Global Markets
China stocks rose on Friday as the central bank officially launched a swap facility aimed at boosting the equity market, although shares elsewhere in Asia were mixed in the wake of data confirming a slowdown in the world's second-largest economy.
Hong Kong's Hang Seng traded 1.14% higher, getting an additional lift from technology shares following solid earnings a day earlier at Taiwanese chipmaker and Nvidia supplier TSMC. Taiwan's equity benchmark climbed 2.62%. Japan's Nikkei added 0.38%, helped by a weaker yen versus the dollar.
Overnight, data showed U.S. retail sales rose a stronger-than-expected 0.4% last month after an unrevised 0.1% gain in August. A separate report showed initial jobless claims dropped by 19,000 to a seasonally adjusted 241,000 last week.
FII/DII Tracker
The foreign institutional investors (FIIs) offloaded equities worth Rs 7,421 crore on October 17, while domestic institutional investors purchased equities worth Rs 4,979 crore on the same day.
Crude Oil
Crude oil futures steadied on Friday after strong US retail sales data, but Chinese economic indicators remained mixed and prices were headed for their biggest weekly loss in more than a month on concerns about demand.
Brent crude futures gained 8 cents, or 0.1%, to $74.53 a barrel, while US West Texas Intermediate crude was at $70.82 a barrel, up 15 cents, or 0.2%.
Currency Watch
The Indian rupee fell 1 paisa to 84.07 against the US dollar in early trade. The dollar index, which tracks the movement of the greenback against a basket of six major world currencies, declined 0.13% to 103.69 level.
(With inputs from agencies)
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