Slump in Indian stocks continues; indices decline for seventh consecutive session

Benchmark stock indices in India slumped today, extending the losses for the seventh straight session and touching a new multi-month low. Sensex closed at 77,339.01 points, down 241.30 points or 0.31%, while Nifty closed at 23,453.80 points, down 78.90 points or 0.34%. Among the sectoral indices, Nifty IT, media, and oil and gas were the top losers, while metal, PSU Bank, and realty were the top movers, NSE data showed.

"Consolidation continued in the market; a slowdown in earnings growth and a weak rupee due to inflation impacted the sentiment. IT stocks reacted negatively today due to a reduced expectation of a FED rate cut in December, which may pose a delay in spending in the BFSI segment," said Vinod Nair, Head of Research, Geojit Financial Services.

The continued fall in the indices sustained due to a range of factors, including relatively weak Q2 earnings, sustained foreign fund flows, and rising domestic inflation—both retail and wholesale.

"We are of the view that the current market texture is weak but oversold; hence, we could expect one quick pullback rally from the current levels," said Shrikant Chouhan, Head Equity Research, Kotak Securities.

Going ahead, Ajit Mishra, SVP, Research, Religare Broking, recommends investors maintain a cautious outlook on the index and focus selectively on stock-specific opportunities.

"The market continued its downward trend, slipping nearly half a percent. Nifty saw a sharp dip initially but managed to recover most of its losses mid-session before eventually closing with a modest cut at 23,453.80. Sector-wise, there was a mixed performance, with metals, FMCG, and auto gaining, while IT and energy sectors remained under pressure. The broader indices also showed mixed results, as the midcap index remained flat while the smallcap index declined by nearly half a percent. Oversold conditions in heavyweight stocks across sectors are currently slowing the pace of the decline. We recommend maintaining a cautious outlook on the index and focusing selectively on stock-specific opportunities," he added.

On Friday, the Indian stock markets were closed on account of Guru Nanak Dev Jayanti. The truncated trading week did little to stem the FII exodus, who have withdrawn Rs 29,533.17 crore from Indian markets in November so far. On the other hand, DIIs poured in Rs 26,522.32 crore in the Indian markets so far this month. So far, FII selling has wiped off a massive Rs 50 lakh crore from Indian markets ever since the market's euphoria toned down less than 2 months ago.