Equity benchmark indices declined for the fourth consecutive day on Thursday amid sustained selling by overseas investors, geopolitical uncertainty and nervousness ahead of key results. The Sensex rose 529 points but witnessed intense selling pressure a couple of hours before the close of trade. Concerns over the geopolitical tensions in West Asia and speculation about the delay in rate cuts by the Federal Reserve continued to weigh on sentiment.
The Sensex ended the session at 72,489, with a decline of 455 points, or 0.6 per cent. The Nifty 50 ended the session at 21,996, a decline of 152 points or 0.7 per cent. Both indices ended at their lowest level since March 26. The last time the two indices declined for four sessions in a row was on October 26 last year.
Foreign Portfolio Investments (FPIs) were net sellers on Thursday, selling Rs 4,260 crore, while domestic institutions bought shares worth Rs 2,285 crore. In the last four trading sessions, FPIs have yanked out Rs 18,700 crore from the equities cash segment. Tensions have been simmering in the equity markets, fueled by misfiring bets over the scale and timing of the Federal Reserve’s interest rate cuts.
Investors have been booking profits as they grapple with resilient economic growth and inflation, which are compelling them to reassess their bets on rate cuts. The ongoing quarterly results, which will provide crucial insights into the market’s performance, are eagerly awaited as there are currently no positive triggers for the market.
Worries over geopolitical tensions resurfaced after Prime Minister Benjamin Netanyahu said Israel would make its own decisions and do everything necessary to defend itself in response to the Iranian attack. Netanyahu made this statement after he met with UK Foreign Secretary David Cameron. Over the weekend, Iran launched an unprecedented attack on Israel in response to the country’s involvement in a strike at the Iranian consulate in Damascus. However, most of the missiles were intercepted by the Israeli military.
The Indian equity market is also bracing for the upcoming seven-phase general elections, set to begin on Friday. The projected third-term win for Prime Minister Narendra Modi has been priced in by the market. It is nevertheless adding to a layer of uncertainty, causing some nervousness among investors.
“The market saw some relief at the start of the session on the back of a healthy outlook by the IMF on the Indian Economy. However, it failed to sustain at higher levels amid volatility and declined for the fourth consecutive day. Strong selling in the last three days due to the uncertain global environment dampened the sentiments. Overall, we expect volatility to continue in the market without any major positive trigger. In contrast, the focus will continue on stock-specific action amid the earning season,” said Siddhartha Khemka, head of retail research of Motilal Oswal Financial Services.
Going forward, investors will keenly track monetary policy officials’ statements and Japan’s inflation data for further cues.
“Markets have already discounted favourable earnings and election results. The chances of disappointment are higher, and one cannot see many positive triggers going forward,” said Ambareesh Baliga, an independent equity analyst.
Barring four, all Sensex stocks ended with losses. HDFC Bank, whose quarterly results will be announced on Saturday, fell 0.98 per cent, followed by ICICI Bank, which fell 1.1 per cent. Both stocks were the biggest drag on Sensex performance.
Meanwhile, Nestle and Titan were the biggest losers at over 3 per cent each. Market breadth remained mixed, with 2,047 stocks declining and 1,761 advancing.
First Published: Apr 18 2024 | 8:30 PM IST
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