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The Indian stock market concluded a volatile trading session on October 24th, with the benchmark indices exhibiting mixed performance. While the Sensex registered a marginal gain, the Nifty ended the day in the red. The market's muted performance can be attributed to several headwinds that continue to weigh on investor sentiment.
The FMCG and IT sectors were among the major drag factors on the Nifty. Hindustan Unilever, Colgate Palmolive, and Marico were the primary contributors to the decline in the Nifty FMCG index. Meanwhile, the IT sector also closed in the red, reflecting concerns regarding global economic uncertainties and their potential impact on the technology industry. Despite the weakness in these sectors, financial names provided some support, with the Nifty PSU Bank index leading the gains. This positive performance in the banking sector suggests potential confidence in the overall economy and a positive outlook for the financial industry.
The primary headwind that the market is currently grappling with is the relentless selling by Foreign Institutional Investors (FIIs). As of October 23rd, FIIs had sold a staggering Rs 93088 crores worth of Indian equities. This unprecedented outflow of foreign capital, attributed to the elevated valuations in India and more attractive opportunities in markets like China and Hong Kong, is exerting significant downward pressure on the market. The situation is compounded by a confluence of other factors, including disappointing Q2 earnings, escalating geopolitical tensions in the Middle East, uncertainty over the pace of US interest rate cuts, the looming US election, and surging US bond yields. These factors contribute to a generally cautious investor sentiment and create volatility in the market.
Looking at the global scene, markets in the Asia-Pacific region were mixed on Thursday morning. South Korea's Kospi declined due to disappointing third-quarter GDP growth, while Japan's Nikkei 225 and Australia's S&P/ASX 200 showed positive performance. On Wall Street, all three main indices finished lower, driven by losses in consumer discretionary, technology, and communication services stocks. This suggests a broader global trend of investor uncertainty and potential economic headwinds.
Source: Sensex Ends Marginally Lower, Nifty Below 24,450; Dabur Dips 3%, Adani Total Rises 8%