Indian stock market today: It was another quiet day for Indian markets as the initial rally in IT stocks, which powered the indices upward, was quickly offset by a sharp downturn in the financial and auto pack, resulting in a flat close for both the Nifty 50 and Sensex on Wednesday, October 23.
The Nifty 50 ended the session with a 0.15% drop at 24,435, while the Sensex ended trade with a cut of 0.17% at 80,081. Thirty-two constituents of the Nifty 50 closed in the negative territory, led by Mahindra & Mahindra, which experienced a decline of 3.2%.
Other notable laggards included Sun Pharmaceuticals, Eicher Motors, Shriram Finance, Power Grid Corporation, Larsen & Toubro, Adani Ports & SEZ, NTPC, and Cipla, all of which recorded losses exceeding 1.5%.
It appears that investors are seizing the opportunity to book profits on every price rise, a trend that has been evident over the past few trading sessions.
Expensive valuations, muted earnings reported by major companies for the September-ending quarter so far, ongoing selling pressure from foreign portfolio investors (FPIs), rising tensions in the Middle East, and uncertainty surrounding the upcoming U.S. elections are some of the key factors currently weighing on the market.
Companies that reported earnings below estimates are experiencing significant selloffs in their shares, while those that exceeded street expectations are witnessing their stock prices reach fresh record highs.
Despite the pressure on large-cap stocks, mid and small-caps quickly rebounded in today’s session following a sharp decline in the previous trading day. The Nifty Midcap 100 index closed the session with a gain of 0.64%, settling at 56,533, while the Nifty Smallcap 100 index finished with a rally of 1.24%, reaching 18,285.
Commenting on today's market performance, Vinod Nair, Head of Research, at Geojit Financial Services said, “Investor mindset turned gloomy with the tepid earnings and a knee-jerk reaction from FIIs, which dragged the market sentiment. However, mid and small-caps are experiencing bargain hunting following the recent decline, though the sustainability of this momentum-driven buying remains uncertain.”
"The US 10-year yield inched higher, signalling a slower tempo of rate cuts by the FED, which is poised for a risk-off sentiment towards EMs," he added.
Among sectoral indices, the Nifty IT saw a significant recovery in today’s session, rising by 2.38%, ending a three-day losing streak. This uptick was driven by a sharp increase in the shares of Coforge and Persistent Systems, both of which reported better-than-expected earnings for the September quarter.
Both shares hit fresh highs during the trading day, ending with gains exceeding 10%. Other sectoral indices, including Nifty PSU Bank, Nifty Media, and Nifty FMCG rose up to 0.15%.
Conversely, the pharma sector continues to face challenges, with the Nifty Pharma index declining 1.56% to 22,471, marking its third consecutive day of losses.
Today's drop has brought the index down to a two-month low. Similarly, the Nifty Auto index extended its downward trend for the second day, falling 0.71% to reach a near three-month low.
Among Nifty 500 stocks today, Deepak Fertilisers & Petrochemicals Corporation, Amber Enterprises, Firstsource Solutions, Coforge, and Persistent Systems experienced sharp gains of up to 16.5%. Overall, 36 constituents within the index concluded Wednesday's trading with gains exceeding 4%.
Conversely, shares of Chennai Petroleum Corporation and Rajesh Exports fell sharply, recording losses of 10.6% and 8.1%, respectively. Additionally, Gujarat Fluorochemicals, ABB India, Siemens, and Mahindra & Mahindra closed the session with declines of up to 5%.
Goldman Sachs Group downgraded Indian equities to 'neutral' from 'overweight,' citing slowing economic growth that is impacting the outlook for corporate earnings, Bloomberg reported.
The group had previously raised Indian stocks to 'overweight' late last year, highlighting earnings growth over two years despite global macroeconomic headwinds. However, the weak earnings reported by companies so far for the September quarter have made them more cautious about Indian stocks.
The analysts expressed concerns about high valuations and noted that a less supportive backdrop could limit the near-term upside for local shares.
Goldman Sachs analysts lowered their 12-month target for the Nifty 50 Index to 27,000 from 27,500 previously, implying a 10% upside from Tuesday’s close.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
