The Indian share market witnessed a significant decline on Friday, October 18, with major indices slipping amid weak Q2 earnings reports. The S&P BSE SENSEX fell 563.57 points, or 0.70%, to 80,443.04 points, while the NSE NIFTY50 shed 170 points, bringing it down to 24,574.50 points. Investors were left concerned as disappointing quarterly results and management commentaries weighed heavily on the market.
Broad-based market sell-off
The stock market opened with a broad-based sell-off as poor Q2 earnings shook investor confidence, leading to a decline across the board. Sectoral indices, including the BSE IT, witnessed substantial losses, with the IT index down by nearly 1%. Major contributors to this fall were Infosys, LTIMindtree, Tech Mahindra, and Coforge.
Despite Infosys reporting decent results, the lack of any positive surprises dampened the market sentiment further. Share market investment in the IT sector, typically considered a robust choice, has become volatile amid these weak financial reports.
Key gainers and losers
On the NSE, notable stocks such as BPCL, Shriram Finance, and Titan Company were among the top losers. On the other hand, Wipro, Axis Bank, and TCS emerged as some of the rare gainers, though the overall market mood remained bearish. Wipro's shares jumped nearly 5% after reporting favourable Q2 numbers, providing some relief to investors who have diversified their share market investment portfolios.
However, the broader market remained sluggish. The BSE MidCap index was down 284.84 points, or 0.60%, and the SmallCap index fell 594.82 points or 1.05%. Investors in smaller companies, generally seen as a safer share market investment during stable periods, faced setbacks amid the market’s downtrend.
Foreign investor impact
The ongoing sell-off was exacerbated by persistent selling from foreign investors. Foreign Institutional Investors (FIIs) and Foreign Portfolio Investors (FPIs) net sold equities worth ₹7,421.40 crore on Thursday, while Domestic Institutional Investors (DIIs) net bought shares worth ₹4,979.83 crore.
This dynamic put additional pressure on the market, with foreign investors steering away from share market investment due to weak earnings and geopolitical concerns, particularly in West Asia.
Global market trends and impact
Global markets showed mixed performance, adding to the uncertainty in the Indian share market investment scene. Asian stocks presented a mixed bag, with Japan’s Nikkei seeing gains driven by a weaker yen. Crude oil futures inched higher on the back of declining U.S. oil inventories and rising tensions in the Middle East, adding further complexity to the global market outlook.
In the U.S., Wall Street indices like the S&P 500 and Nasdaq ended mostly flat on Thursday as investors sifted through a range of earnings reports and economic data. This cautious approach by global investors is influencing share market investment trends in India, with risk-averse attitudes prevailing.
Q2 earnings disappoint
The primary driver behind the market’s decline was the disappointing Q2 earnings from major companies. Bajaj Auto, Nestle India, and LTIMindtree, among others, failed to meet market expectations, further dampening investor confidence.
Even companies with good results, like Infosys and Wipro, could not lift the market, as their outcomes lacked any significant surprises to justify a rebound in share market investment.
Sentiment was further dampened by management commentaries that offered little hope for a quick turnaround. This has caused investors to be cautious, with many looking to adjust their share market investment strategies based on revised earnings forecasts.
Sectoral performance
All sectoral indices on the BSE were deep in the red. The IT sector, once a darling for share market investment, saw its index fall by nearly 1%, while other sectors faced similar or even worse fates. The auto sector, impacted by disappointing results from key players like Bajaj Auto, also contributed to the market’s overall downtrend.
Outlook for investors
For investors, this downturn serves as a reminder of the volatility inherent in share market investment. While some stocks like Wipro and Axis Bank managed to post gains, the broader market trend suggests caution. The relentless selling by foreign investors and ongoing geopolitical tensions are likely to keep the market under pressure in the near term.
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