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India’s benchmark stock indices fell for the sixth consecutive day on Thursday, given the geopolitical uncertainties stemming from the Israel-Hamas war and the resultant rise in crude prices coupled with higher-for-longer U.S. rates.
The headline indices logged the longest stretch of losses in over seven months. The Sensex has fallen 4.94% in the last six sessions, and it was down 7% from its life high scaled on Sept. 15. The Nifty slipped 4.82% in six days and was down 6.8% from its all-time high.
The S&P BSE Sensex closed 900 points, or 1.41%, lower at 63,148.15, while the NSE Nifty 50 fell 265 points, or 1.39%, to end at 18,857.25.
Intraday, the S&P BSE Sensex dropped 1.49% to 63,092.98, and the NSE Nifty 50 slipped 1.49% to 18,837.85, the lowest level since June 27.
“As long as the index is trading below 19,000, the weak sentiment is likely to continue till 18,800–18,725 levels,” said Shrikant Chouhan, the head of equity research (retail) at Kotak Securities Ltd. “On the flip side, one relief rally is possible only after the dismissal of 19,000, and above the same, the index could move up till 19,100-19,150.”
Metal, auto and financial services sectors dragged as all sectoral indices declined.
The strongest headwind for the market is the stubbornly high U.S. bond yields, and with the 10-year Treasury yield at nearly 5%, FPIs are likely to be in sell mode, according to VK Vijayakumar, chief investment strategist at Geojit Financial Services.
“Sectors like banking and I.T., which constitute the largest segments of the AUM of FPIs, are likely to be under pressure. This will provide opportunities for long-term investors to buy quality stocks, particularly in banking, at attractive rates,” Vijayakumar said.
Broader markets recovered from the day’s low to pare some losses. The Nifty Smallcap 250 recovered over 300 points, and the Nifty Midcap 150 recovered over 150 points after declining to the lowest levels in two months intraday since August.
“The large-cap is much better poised than the mid-cap and small-cap, but the larger flows we are seeing are going towards the broader market,” Vaibhav Sanghavi, chief operating officer at ASK hedge Solutions, told BQ Prime.
The Nasdaq index futures fell about 1% as investors punished companies reporting weaker-than-expected earnings. Meta Inc. sank 4% in U.S. pre-market trading, and Google’s parent Alphabet Inc. lost 2.3%.
The bearish mood carried over to other markets, with European and Asian equities also recording steep losses. In Asia, the MSCI Asia Pacific Index was set for its lowest levels in almost a year, with benchmarks in South Korea and Japan sliding more than 2% each.
Stocks in Hong Kong erased gains and mainland China edged up, continuing from the previous session when fresh stimulus measures soothed sentiment.
HDFC Bank Ltd., Reliance Industries Ltd., Bajaj Finance Ltd., Larsen and Toubro Ltd., and Mahindra and Mahindra Ltd. were negatively adding to the change in the Nifty.
Axis Bank Ltd., ITC Ltd., HCL Technologies Ltd., IndusInd Bank Ltd. and Adani Ports and Special Economic Zone Ltd. were positively contributing to the change.
The broader market indices declined; the S&P BSE MidCap index was down 1.06%, whereas the S&P BSE SmallCap index was 0.32% lower.
Nineteen out of the 20 sectors compiled by BSE Ltd. declined, while S&P BSE Utilities and S&P BSE Power advanced. S&P BSE Auto, S&P BSE Metal, and S&P BSE Oil and Gas fell the most.
The market breadth was skewed in favour of sellers. About 1,433 stocks rose, 2,226 declined, and 141 remained unchanged on the BSE.
Monthly futures and option expiries were also added to the fall in Thursday’s session. “It’s a simple ‘wait and watch’ moment. Given the current state, opening new positions is not advisable,” Shrey Jain, chief executive officer of SAS Online, said.
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