Indian Stock Markets Face Extended Slump Amid Global and Domestic Concerns

The Indian stock market continued its downward trajectory, opening lower once again during Friday’s trading session. The Nifty 50 index opened with a negative gap at 24,664, hitting an intraday low of 24,567 shortly after the session began. This dive marked a loss of approximately 560 points for the index over the span of four consecutive sessions. Similarly, the BSE Sensex opened weaker at 80,749 and declined to an intraday low of 80,409, contributing to a four-day cumulative loss of about 1,564 points.

The Nifty Bank index reflected a similar trend, starting at 51,261 and reaching an intraday low of 51,000. However, it experienced a rebound as banking stocks attracted buyers at lower valuations, allowing the index to recover some ground during the session.

Market experts attribute the ongoing selling pressure to a combination of global uncertainty and domestic market concerns. Analysts highlight the impending U.S. Presidential Elections and escalating tensions in the Middle East as primary sources of hesitance among international investors. Domestically, attention is focused on the upcoming Maharashtra State Assembly polls, while the release of second-quarter financial results has also disappointed investor expectations.

Mahesh M Ojha, AVP — Research at Hensex Securities, stated, “Foreign Institutional Investors (FIIs) are executing significant sell-offs due to speculations about a tight race in the U.S. elections. Meanwhile, Domestic Institutional Investors (DIIs) remain cautious, awaiting the results of the Maharashtra elections.”

Anshul Jain, Head of Research at Lakshmishree Investment and Securities, emphasized, “Geopolitical tensions in the Middle East add to the market’s volatility and uncertainty, fueling aggressive sell-offs.”

Further highlighting the financial landscape, Siddhartha Khemka, Head of Research and Wealth Management at Motilal Oswal, noted, “The underwhelming Q2 earnings from several major companies have intensified with sell-offs on Dalal Street.” Additionally, market sentiments are further dampened by the Indian rupee’s depreciation, raising concerns over India’s fiscal deficit.

In terms of levels to watch, Anshul Jain pointed out, “The critical support level for the Nifty 50 index has shifted lower, with immediate support observed at 24,500, and further crucial support at the 24,350 to 24,300 range.”

The BSE witnessed losses across all sectoral indices, with the BSE IT index declining nearly 1%. Notably, Infosys, LTIMindtree, and other tech firms were major detractors. Market experts noted that the overall market mood turned bearish due to unsatisfactory corporate earnings and continuous foreign investor selling.

Trade data reflected heavy selling by FIIs amounting to ₹7,421.40 crore, contrasted by net buying from DIIs amounting to ₹4,979.83 crore. Asian market sentiment was mixed as Japan’s Nikkei surged, supported by a weaker yen, whereas other indices displayed varied performances.

The broader implications of these market dynamics are also seen in sectors such as the BSE MidCap and SmallCap indices, which underperformed the benchmark indices due to their domestic focus.