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The Indian equity benchmark indices, BSE Sensex and Nifty50, experienced significant declines on Tuesday, primarily driven by weak global equities and a substantial outflow of foreign funds from the capital markets. The Sensex plummeted by 930.55 points, settling at 80,220.72, representing a decline of 1.15 per cent. Meanwhile, the Nifty50 dropped by 309 points, or 1.25 per cent, to close at 24,472.10. This downturn was primarily attributed to a decline in major stocks such as Mahindra & Mahindra, State Bank of India, Power Grid, Tata Steel, Tata Motors, Larsen & Toubro, NTPC, Bajaj Finance, and Reliance, which collectively contributed to a 505-point drop in the BSE Sensex, as per reports. However, ICICI Bank, Nestle, and Infosys emerged as the major gainers.
The market sentiment was heavily impacted by several factors, including disappointing earnings growth trends, as observed by traders. Analysts noted that weak earnings growth and sluggish global markets significantly weighed on investor sentiment. Rising US bond yields and policy actions in China contributed to the outflow of foreign institutional investor (FII) funds. Exchange data revealed that on Monday, FIIs sold equities worth Rs 2,261.83 crore, while Domestic Institutional Investors (DIIs) purchased equities amounting to Rs 3,225.91 crore. The Indian rupee also ended the day marginally weaker at 84.0775 against the US dollar, marking its lowest-ever closing level, after hitting an all-time low of 84.0825 earlier in the session.
Vinod Nair, Head of Research at Geojit Financial Service, stated, “Bearish sentiment continued to dominate the domestic market today amid heightened volatility, with small and midcap stocks taking the biggest hit.” He further added, “The recent sharp rise in US bond yields signals diminished expectations for aggressive rate cuts by the US Fed, also affecting fund flows to EMs. In the short term, this bearish outlook may persist due to sluggish earnings growth trends.”
Hyundai Motor India Ltd., the Indian subsidiary of the South Korean automaker Hyundai, witnessed a disappointing debut on the stock market. The company’s shares closed over 7 per cent lower than the issue price of Rs 1,960. The company stock opened at Rs 1,931 on the BSE, marking a 1.47 per cent decline from its issue price. It briefly recovered to a high of Rs 1,968.80, up 0.44 per cent, but failed to maintain the momentum, eventually dropping 5.81 per cent to Rs 1,846. On the NSE, Hyundai’s shares debuted at Rs 1,934, down 1.32 per cent, before further tumbling 5.88 per cent to Rs 1,844.65 during the session.
The stock market had opened the day on a subdued note, reflecting weak global sentiment and carrying over the negative momentum from Monday’s decline. The Sensex had gained a modest 183.87 points to start at 81,335.14, while the Nifty rose by 31.55 points to open at 24,812.65. Earlier in the intra-day trading session, the BSE Sensex plunged as much as 1,001.74 points, or 1.23 per cent, to reach 80,149.53. The market displayed a mixed trend, with 22 companies advancing and 27 declining on the Nifty. Shriram Finance, Tech Mahindra, ICICI Bank, HCL Technologies, and Nestle India led the gains, while Tata Steel, Bharat Electronics Limited (BEL), Mahindra & Mahindra (M&M), Tata Motors, and Bharat Petroleum Corporation Limited (BPCL) emerged as the top losers in the opening session.
Asian markets had a mixed performance, with Seoul and Tokyo ending the day lower, while Shanghai and Hong Kong managed to close higher. In the commodities market, Brent crude, the global oil benchmark, rose by 0.61 per cent to reach $ 74.74 a barrel. While the European markets, on the other hand, were trading in negative territory. The US markets had a mixed session on Monday.