The Indian stock market opened on a weaker note today, Friday, October 11, 2024, as both Sensex and Nifty started in the red. The benchmark indices were down amid selling pressure in key banking and telecom stocks, with Bharti Airtel and Bajaj Finance among the top losers. Global market volatility and weak U.S. inflation data have contributed to the cautious market sentiment.
Sensex and Nifty 50 Start Lower
At 9:24 a.m., the Sensex was down by 142 points, or 0.17%, at 81,469, while the Nifty 50 declined by 36 points, or 0.12%, to 24,960. The opening losses come after modest gains seen in the previous session, with global factors driving the market’s movement.
The broader Nifty Bank index was also down by 0.4%, reflecting the selling pressure in financial services stocks. Both domestic and foreign institutional investors have been cautious due to concerns over inflation and the impact of the U.S. Federal Reserve’s future interest rate decisions.
Bharti Airtel and Bajaj Finance Lead Declines
Bharti Airtel and Bajaj Finance were among the top losers on the Sensex and Nifty 50 in early trade. Bharti Airtel shares dropped following concerns over potential regulatory changes in the telecom sector and ongoing tariff-related issues. Bajaj Finance, meanwhile, saw selling pressure due to concerns about rising borrowing costs and potential margin compression in the financial services sector.
Other notable laggards in the early trading session included Asian Paints, Bajaj Finserv, ICICI Bank, and HDFC Bank, which all saw declines amid weak sentiment in the financial services and consumer sectors.
IT and Metal Sectors Show Strength
Despite the overall market weakness, some sectors showed resilience. IT and metal stocks were among the top gainers in early trade, with companies like Infosys, TCS, and Tata Steel posting marginal gains. The IT sector is benefiting from the positive outlook for global demand, even though TCS’s Q2 earnings were slightly below expectations.
Metal stocks also gained, driven by higher commodity prices and improving global demand for industrial metals.
Global Cues Weigh on Indian Markets (continued)
U.S. markets closed in the red on Thursday after higher-than-expected inflation data raised concerns about the Federal Reserve’s future rate cuts. The Dow Jones Industrial Average dropped by 57.88 points, or 0.14%, to close at 42,454.12, while the S&P 500 declined by 11.99 points, or 0.21%, to 5,780.05. The Nasdaq Composite also ended lower, shedding 9.57 points, or 0.05%, to settle at 18,282.05.
The higher-than-expected U.S. inflation figures, coupled with jobless claims surging by 33,000 to 258,000 for the week ending October 5, 2024, have added to concerns about the strength of the U.S. economy. These global developments have led to a risk-averse sentiment among Indian investors, contributing to the lower opening for Sensex and Nifty.
Key Sectoral Movements in Indian Markets
Among the sectoral indices, the IT and PSU Bank indices traded in the green, while sectors such as auto, financial services, FMCG, and realty faced significant declines. The Nifty midcap and small-cap indices were also trading in positive territory, with Nifty midcap 100 index gaining 0.13% and Nifty small-cap index up by 0.18%.
The IT sector, one of the strongest performers in recent months, continues to attract investor interest due to strong demand for digital transformation services. Companies like Infosys, HCL Technologies, and Tech Mahindra showed resilience despite the overall weak market sentiment.
On the other hand, banking stocks were under significant pressure. ICICI Bank, HDFC Bank, and Kotak Mahindra Bank all registered losses as inflation concerns weighed on the financial sector. Rising interest rates are expected to impact borrowing costs, which could lead to margin compression for financial institutions.
Foreign Institutional Investor (FII) Activity
Foreign institutional investors (FIIs) have extended their selling spree in the Indian equity market. On October 10, 2024, FIIs sold equities worth ₹4,926 crore, marking a continued exit from Indian equities amid global uncertainty.
Domestic institutional investors (DIIs), however, have been net buyers, purchasing equities worth ₹3,878 crore on the same day, offering some support to the market.
The ongoing FII outflows are likely driven by more attractive valuations in other markets, particularly in Chinese and U.S. stocks, as well as concerns about high valuations in Indian equities.
Midcap and Smallcap Indices Outperform
Despite the overall weakness in large-cap stocks, mid-cap and small-cap stocks continued to outperform. The Nifty midcap 100 index was up by 79 points or 0.13%, trading at 58,995, while the Nifty small-cap index gained 39 points or 0.18%, reaching 18,939.
These indices have shown resilience as investors continue to look for opportunities in high-growth sectors like consumer durables, pharmaceuticals, and speciality chemicals, which are less impacted by inflationary pressures and global economic trends.
Looking Ahead: Market Volatility Expected to Continue
As Indian markets continue to face volatility driven by both domestic and global factors, investors should brace for further fluctuations in the coming days. Market experts predict that the near-term outlook remains uncertain, with alternating phases of FII selling and DII buying expected to influence market direction.
At the same time, the focus will remain on upcoming earnings reports, particularly in the IT and banking sectors, as investors assess whether companies can meet or exceed market expectations amid rising inflation and global economic headwinds.
Conclusion
The Indian stock market’s lower opening reflects global concerns over rising inflation, weak U.S. job data, and underwhelming corporate earnings reports, particularly from TCS.
With Bharti Airtel and Bajaj Finance among the top losers, and IT and metal stocks showing some strength, investors are treading carefully.
Going forward, the focus will be on how companies navigate these challenges and whether foreign and domestic institutional investors continue to adjust their positions in response to global cues.
Disclaimer
This article is for informational purposes only and does not constitute financial advice. Investors should consult with a licensed financial advisor before making any investment decisions.
