Nifty 50 and Sensex stock indices fell heavily on Tuesday, with FMCG, consumer and automobile stocks reporting weak results being most impacted. Nearly ₹5 lakh crore of investors lost money.
Nifty fell 258 points (1.07%) to close at 23,883, while Sensex fell 821 points (1.04%) to close at 78,675. Of the 50 Nifty stocks, 44 closed in the red.
The FMCG (fast moving consumer goods) sector was under pressure, with the Nifty FMCG index falling 2%, with Britannia’s weakness playing a major role, while other consumer stocks like Asian Paints also extended losses after it cut its FY25 volume growth outlook. In the auto sector, Samvardhana Motherson closed down 5%, while Bosch fell 5% ahead of its upcoming quarterly results.
Only 4 out of 50 Nifty 50 stocks closed in the green, including Trent, Sun Pharma, HCL Tech and Infosys among the top gainers. Whereas out of 30 BSE Sensex stocks, only 3 stocks registered gains, which include Sun Pharma, Infosys and ICICI Bank.
Why are FIIs selling?
JM Financial says the largest in history FPI (foreign portfolio investor) flows have put the Indian markets on edge. In most cases, when Nifty 50 has declined more than 5 percent in a month.
1) Weak profit season
2) Indian stock market is more expensive
3) Flow of foreign capital to other markets (flow of foreign capital has been seen in China, Japan and Taiwan)
Vike Vijayakumar, chief investment strategist, Geojit Financial Services, says continued selling by FPIs is supporting the bear side and pulling the market down. It is important to note that the pace of FII selling is slowing down (FPI selling was ₹2,026 crore on Monday) and flows into mutual funds are continuing to increase, which will enable DIIs (domestic institutional investors) to continue buying. ,.
Akshay Chinchalkar, Head of Research, Axis Securities, said Nifty was stuck in the no-man’s land between resistance at 24,360 and support at 24,000, which is in line with market volatility. He also mentioned that Nifty failed to find any direction from the low of 24,073 on October 25.
Disclaimer: This information is for informational purposes only and should not be construed as investment advice. It is recommended to consult a financial advisor before making investment decisions.