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The Indian stock market faced a continued onslaught of selling pressure on Friday, driven by a confluence of factors, including relentless foreign institutional investor (FII) selling, disappointing second-quarter earnings, and global uncertainties. The benchmark indices, Sensex and Nifty, plummeted over 1%, extending a week-long decline that has seen the Nifty shed almost 3%. This downward trend marked the fifth consecutive session of losses for the benchmarks, highlighting the bearish sentiment gripping the market. The midcap index, already in correction territory, has fallen over 10% from its recent highs, signaling broader market weakness.
FIIs continued their aggressive selling spree, offloading equities worth Rs 5,062 crore on October 24th, adding to their near Rs 1 lakh crore selling spree in October. This intensified selling comes amidst heightened tensions in the Middle East and a shift in emerging market investment flows towards China after the recent stimulus announcements. Adding to the FII concerns are anxieties over urban consumption and demand growth in India. This FII exit strategy has sent ripples through the stock market, raising investor concerns about a potential short-term drawdown.
IndusInd Bank, one of India's top 10 lenders by market capitalisation, experienced a significant setback, with its stock plummeting by almost 20% in today's session. This decline wiped it off the list of India's top 10 most valued lenders. The bank reported a steep 40% decline in net profit to Rs 1,331 crore for the September 2024 quarter, leading to heavy selling pressure. Higher provisions, subdued growth in its higher-yielding loan portfolio, and declining other income compounded the weak earnings. Leading brokerages have also revised their target price for the stock downward, reflecting concerns over the bank's near-term growth potential. IndusInd Bank emerged as the biggest loser among both Sensex and Nifty stocks, further exacerbating the day's market sell-off.
Source: Relentless FII selling, earnings setbacks and more: Factors behind the selloff on Dalal Street