Indian equity benchmarks witnessed a sharp selloff on Tuesday, with the Sensex plunging 930.55 points to close at 80,220.72 and the Nifty50 dropping 309 points to end at 24,472.10, as persistent foreign investor selling and disappointing quarterly earnings dented sentiment.
The selloff deepened in the latter half of the trading session, with the Nifty falling below the crucial 24,500 level. Among sectoral indices, PSU Banks were the worst hit, tumbling over 4 per cent. The broader markets faced severe selling pressure, with the Nifty Midcap Select and Nifty Next 50 indices declining 1.98 per cent and 2.90 per cent respectively.
Market breadth was extremely negative, with 3,430 stocks declining against just 557 advances on the BSE. The number of stocks hitting 52-week highs stood at 168, while 159 stocks touched their 52-week lows.
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“Foreign investors are fleeing Indian equities to invest in relatively cheaper locations such as China, especially after the stimulus announcement by its government to boost its slowing economy,” said Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd.
Among individual stocks, ICICI Bank (up 0.74 per cent), Nestle India (up 0.10 per cent), and Infosys (up 0.04 per cent) were the only gainers on the Nifty. The major losers included BEL (-3.79 per cent), M&M (-3.63 per cent), Coal India (-3.36 per cent), Adani Enterprises (-3.29 per cent), and SBI (-2.97 per cent).
ICICI Bank was the sole gainer among Sensex stocks, rising by 0.67 per cent to ₹1,267.75. On the losing side, Mahindra & Mahindra fell by 3.79 per cent, followed by Tata Steel (-2.94 per cent) and Power Grid (-2.92 per cent). SBI and Tata Motors also saw declines of 2.91 per cent and 2.64 per cent, respectively.
“Markets witnessed higher volumes on a down day even as investors disappointed with underwhelming Q2 numbers sold stocks regardless of prices to protect whatever profits are left on the table for them,” noted Deepak Jasani, Head of Retail Research at HDFC Securities.
Technically, the Nifty has broken below its 20-week moving average of 24,718, suggesting further weakness ahead. “On the downside, we expect the Nifty to drift towards 24000 where there is a high concentration of open interest on the put side implying support,” said Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas.
The selling pressure coincides with rising global uncertainties and volatile oil prices. “Oil prices have been volatile due to ongoing geopolitical tensions and slowing demand growth in China,” according to Shrikant Chouhan, Head Equity Research, Kotak Securities.
Foreign Institutional Investors (FIIs) and Foreign Portfolio Investors (FPIs) remained net sellers with an outflow of ₹2,261.83 crore in the capital market segment. Domestic Institutional Investors (DIIs) recorded a net inflow of ₹3,225.91 crore on the same day. Other market participants showed mixed results, with clients and NRIs continuing to register net selling, while proprietary traders posted a modest net gain of ₹79.91 crore.
Hardik Matalia, Derivative Analyst at Choice Broking noted the increased volatility, reflected in the India VIX’s 4.60% rise to 14.3950, suggests continued market uncertainty ahead.
“The RBI’s latest bulletin upholds India’s GDP growth forecast of 7.2 per cent for FY25, suggesting that the Q2 slowdown is temporary, with festive season consumption expected to rebound,” said Vinod Nair, Head of Research, Geojit Financial Services, offering a silver lining amid the market turbulence.
