At 75,352.10, the BSE Sensex was down 383.86 points, or 0.51%. The Nifty dropped 118 points, or 0.51%, to 22,795.25.
In keeping with the overnight selloff in US markets that was sparked by data indicating a surprising increase in US jobless claims and a lackluster statement from Walmart, benchmark stock indices the Sensex and Nifty fell throughout Friday’s trading. Concerns include significant foreign outflows from India and a resurgence of interest in mainland Chinese stocks. Another worry is the possibility of Trump tariffs being retaliated. In India, earnings are nothing to brag about. In addition, India’s relative stock market values appear high given the unpredictability of the world economy. The major stock indices, which have now dropped in 13 of the last 15 sessions, are being impacted by all of these causes.
The BSE Sensex was down 383.86 points, or 0.51%, on Friday, closing at 75,352.10. The Nifty dropped 118 points, or 0.51%, to 22,795.25. M&M’s stock fell 5.8% to Rs 2,675. ICICI Bank, Power Grid, UltraTech Cement, and Tata Motors all had declines of up to 2.5%. Other significant Sensex losers included Adani Ports, Zomato, Sun Pharma, and Maruti Suzuki India.
The market breadth indicator, according to ICICI Securities, is displaying severe pessimism, as the proportion of stocks above the 50- and 200-SMA inside the Nifty 500 universe saw a negative extreme level of 13 this week.
In the past, such a high rating has caused the negative momentum to slow down in the weeks that followed, ultimately creating a stable bottom. Therefore, on dips supported by solid earnings, the emphasis should be on building up quality equities,” it stated.
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The market is reacting badly to possible tariff targets, such as automobiles and pharmaceuticals, and is searching for opportunities in domestic consumption plays that will not be hurt by tariff concerns, according to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Given Trump’s policy of threatening tariffs and then negotiating a drop in taxes on US exports, this is probably a short-term trend. According to Vijayakumar, this will take time to unfold.
Higher import duties are not in the US’s best interests, according to Vijayakumar, since they would cause inflation and encourage hawkish remarks from the Fed, which will affect the US stock market.
“Trump is utilizing the interim time to bargain with trading partners since he will not like this outcome. It is likely that FII selling in India will continue, especially given the resurgence of interest in inexpensive Chinese stocks that are making a good comeback. Largecaps will continue to be under pressure from FII selling,” he stated.
The most recent earnings season was also disappointing for the stock market. Elara Securities reported that the beat-to-miss ratio in its universe continued to drop, dropping from 0.7 times in Q2 to 0.6 times in Q3.
The percentage of misses was higher for small-caps (63%) than for large- and mid-caps (32% and 41%, respectively). Auto, energy, and consumer discretionary had a lower ratio due to a greater number of misses, whereas banks and information technology had a better ratio with one miss each.
According to Nomura India, market fatigue following the good run, when expectations were high, is to blame for the recent stock market selloff, which is comparable to regional markets like Indonesia and Thailand. The Nifty’s value multiple dropped to 19 times one-year future earnings from 21.3 times at its top in September 2024, according to the report, as economic and earnings growth gradually fell short of forecasts.