Indices in the red for second day; stock trading week ends in loss

Indian stock market extended its slide for the second consecutive day on Friday, as sharp selloffs in major largecap stocks--including Reliance Industries, ICICI Bank, State Bank of India, and Trent--weighed heavily on the frontline indices, causing them to end the session in the red.

The 25-basis point rate cut by the US Federal Reserve on Thursday failed to provide relief to the overheated Indian market, as investor sentiment remained subdued amid concerns over softening Q2 earnings.

Consequently, the Nifty 50 closed the session with a decline of 0.21%, settling at 24,148 points, and ended the week down by 0.64%. The Sensex closed 55.70 points, or 0.07%, lower at 79,486, marking a weekly decline of 0.30%.

FII outflow continues

Prashanth Tapse of Mehta Equities said, "After gyrating nearly 700 points in early trades, markets moved in a range-bound manner thereafter and ended marginally lower on selective selling in banking, telecom, metal, oil & gas, and realty stocks. Despite the recovery in global indices, Indian markets continue to bear the brunt of FII fund outflows. The US Fed rate cut failed to enthuse local investors as the undertone remains caution with a negative bias."

In contrast, the broader market experienced heavy selling pressure today, with the Nifty Midcap 100 index plunging 1.42% to 56,300 points. The Nifty Smallcap 100 index fell to 18,433, down 1.76% from the previous closing level.

Among sectoral indices, the Nifty Realty continued its bearish streak for the second consecutive day, closing nearly 3% lower at 967.7. The Nifty Media index also dropped by 2.09%, while the Nifty PSU Bank, Nifty Oil & Gas, Nifty Energy, and Nifty Metal all ended with losses exceeding 1%.

Trent biggest loser 

A total of 27 Nifty 50 stocks ended today’s session in the red, with Trent emerging as the biggest loser. The stock extended its losing streak for the second consecutive day on Friday following weak Q2 results. It closed with a 3.2% decline at ₹6,298, bringing its two-day slide to 9.5%.

Trent has been on a downward trajectory since hitting its all-time high of ₹8,345 in mid-October, correcting by 24.52%. Other stocks such as Coal India, Asian Paints, Tata Steel, and 11 others ended Friday's session with losses of over 1%.

Commenting on today's market performance, Vinod Nair of Geojit Financial Services, said, "Consolidation continued in the market as investors stayed cautious due to disappointment in Q2 earnings and the flight of FIIs."

"The US FED continued its rate-cutting cycle to stimulate the US economy and is expecting a similar 25-bps rate cut in its December policy meeting amid moderation in inflation. While inflation in India is estimated to increase in October and the strengthening USD would reinforce the RBI to hold the rate in the near-term," he added.

Rupak Deof  LKP Securities, said, "The 24,000 level is expected to serve as strong support for the index. If it holds above this level, Nifty bulls may still have an opportunity to regain momentum. However, a break below 24,000 could further weaken the market.

(By arrangement with livemint.com)