Again, Nifty and Sensex end flat; bank stocks save the day

Indian stocks struggled once again to gain momentum, as significant declines in FMCG and realty stocks dragged the frontline indices to a flat close. While banking stocks, particularly those from the public sector, provided some support to the market, they were insufficient to lift the indices higher.

The Nifty 50 ended the session with a 0.15% drop at 24,399, while the Sensex ended trade with a cut of just 0.02% at 80,065. Two dozen constituents of the Nifty 50 closed in the negative territory, led by HUL, which experienced a decline of nearly 6%.

Other laggards included SBI Life Insurance, Hindalco Industries, Nestle India, Bajaj Auto, Britannia Industries, ITC, Tata Consumer, Maruti Suzuki, and HDFC Life Insurance, all of which recorded losses exceeding 1%.

Meanwhile, midvap and smallcap stocks were unable to maintain their momentum following a strong rebound in the previous trading session. Both the Nifty Midcap 100 and Nifty Smallcap 100 indices closed lower, declining by 0.32% and 0.20%, respectively.

FIIs fleeing to China

V K Vijayakumar of Geojit Financial Services said, "The major headwind that the market is facing now is the massive, unprecedented, and sustained FII selling, which has touched ₹93088 crores through October 23rd, as per NSDL data. The fundamental trigger for the FII outflows is the elevated valuations in India and the relatively cheap and attractive valuations in markets like China and Hong Kong."

"The FII selling is getting aggravated by news of a slowdown in corporate earnings. An uptrend in the market is not compatible with a downtrend in earnings growth, and, therefore, the market is witnessing selling at every rise, turning the near-term market structure into a 'sell on rally.’ Investors should be cautious at this juncture and refrain from chasing temporary rallies. High-quality financials and IT stocks can be bought on dips. Digital stocks that continue to show acceleration in growth can be gradually accumulated on declines," he added.

Banks surge; FMCG stocks struggle

FMCG stocks remained under pressure in today's trade as the weak earnings announcements by companies fuelled concerns about the overall health of the sector. The underperformance was primarily driven by subdued consumer demand, particularly in urban markets, where rising inflation has squeezed household budgets.

The September quarter earnings from several FMCG giants, including HUL, missed analysts' expectations, further intensifying fears of a broader slowdown in the sector. HUL, which released its earnings on Thursday, posted a weak set of numbers, causing the stock to decline by 6% in today’s session. During intraday trade, it reached its lowest point in four months.

HUL's management noted that while urban growth slowed, it was partly mitigated by a gradual recovery in rural markets, creating a challenging environment for the quarter. 

A total of 13 constituents of the Nifty FMCG index ended in the red during today’s session, pushing the index down by 2.83% to 58,396 points. This decline brought the index to its lowest level since early July. Since reaching an all-time high of 66,438 points, the index has now corrected by 12%.

Among other sectoral indices, the Nifty Realty index fell by 1.13%, while the Nifty Auto index continued its decline, dropping by 0.52%.

On the winning side, banking stocks continued their upward momentum, driven primarily by public-sector banks. Bank of Baroda, Punjab National Bank, and State Bank of India gained as much as 3%. 

Private-sector banks also saw modest gains, with HDFC Bank, Axis Bank, and IndusInd Bank rising between 0.2% and 0.7%. Overall, the Nifty Bank index closed with a gain of 0.35%. Nifty Pharma rebounds with a 0.44% gain in today's session, ending a 3-day losing streak. 

Aster DM Healthcare gains 10% 

Among the Nifty 500 stocks today, Piramal Pharma led the rally with an impressive 17.4% gain, reaching ₹255, after the company reported strong results for the September quarter. Sona BLW Precision Forgings also saw a significant rise of 13.3%, reaching ₹729, following its agreement with Escorts Kubota to acquire its Railway Equipment Division (RED) as a going concern on a slump sale basis, along with healthy earnings in Q2.

Meanwhile, Aster DM Healthcare shares reacted positively to the company’s results, rising by 10.3% to ₹443.5 apiece. Other stocks such as Syngene International, IDBI Bank, Adani Total Gas, Adani Wilmar Bombay Burmah Trading, RailTel Corporation of India, Five-Star Business Finance, and 53 additional stocks ended the day with gains ranging from 2% to 7.8%.

On the downside, KPIT Technologies experienced a significant slump of 13.7% following its September quarter results. Stocks such as Dr. Lal Pathlabs, VIP Industries, Escorts Kubota, HUL, and 80 other stocks faced losses between 2% and 7.2%.

(By arrangement with livemint.com)