Managing Director and CEO of Elara Capital Harendra Kumar. Photo: Special Arrangement

This image is used for representational purposes only.
| Photo Credit: Getty Images/iStockphoto

For representative purposes.
| Photo Credit: iStockphoto

The story so far: For the sixth consecutive day, BSE Sensex closed lower on Wednesday reflective of a major sell-off among foreign institutional investors and portfolio investors (FIIs/FPIs), mixed earnings and apprehensions about the tightening of the (imports’) tariff regime in the U.S. The thirty-share BSE shed 122.52 points to close 0.16% lower at 76,171.08 points whilst Nifty50 shed 26.44 points to close 0.12% lower at 23,045.25 at close on Wednesday. Furthermore, the larger scheme of things has also triggered a rise in demand for treasury bonds as investors look for a haven.

Why is Trump affecting markets?

On Tuesday, U.S. President Donald Trump issued directives to restore tariff on steel and elevate the tariff on aluminium to 25%. The White House held these were to protect America’s industries which “have been harmed by unfair trade practices and global excess capacity”.

However, the directive was not well received in the Indian markets. This is primarily due to apprehensions about a potential dumping of Asian exports to India, potentially culminating into downward revision of prices and increased competition. Indian steel manufacturers are already amidst a revision in steel prices. For perspective, Indian manufacturer JSW Steel stated in its Q3 earnings about its Net Smelting Return (NSR) in India falling by close to ₹1,800 compared to the preceding quarter. Additionally, with respect to the alleged dumping, India’s Directorate General for Trade Remedies (DGTR) has an ongoing investigation into the imports of ‘non-alloy and alloy steel flat products’.

Why is foreign money moving away?

FIIs and FPIs have been increasingly moving towards U.S. bonds, seeking a haven away from the current modest Indian markets with potentially lesser returns. According to Devarsh Vakil, Head of Prime Research at HDFC Securities, the current situation in the market emanates from tepid domestic earnings growth, elevated valuations in mid and small cap segments, and persistent inflation exceeding the RBI’s lower threshold of 4%, and uncertainty around trade and tariffs. It is imperative to note here that bond yield and stock markets have an inverse relationship. This is because both vie for investor funds, aspiring to outdo the other by offering more returns. Therefore, when U.S. bond yield rises, foreign investors transit from Indian equities to U.S. bonds. Domestic, economic and political certainty alongside monetary policies are other contributing factors. All in all, the entire paradigm contributes to making the dollar stronger and the rupee weaker because of the flow of money.

V.K. Vijaykumar, Chief Investment Strategist at Geojit Financial observed that while the downturn in markets has been because of a combination of factors, the major among them has been the “relentless FII selling”. He told The Hindu about FIIs having sold in the cash market every day, except for two days, so far this year — totalling to ₹93,907 crore. He further noted that while domestic institutional investors have been compensating for the FII outflows, “market sentiments have been impacted.” In addition to this, Apurva Sheth, Head of Market Perspectives & Research at SAMCO Securities pointed out that dollar denominated returns of Indian equities “have not been impressive at all”.

Mid and small caps stocks are also experiencing a correction due to the sell-off spree. All contributing to a downward revision in valuation. According to Siddarth Bhamre, Head of Research at Asit C Mehta Investment Interrmediates, the correction here could be attributed to “liquidity finding its way out”. He explained, “Last year most of the money pumped by participants in equity MFs went into small and midcap funds. The correction now is leading to shift in investors strategy to move from small and mid-caps to large cap stocks and hence this severe underperformance.” Additionally, according to Geojit’s Chief Investment Strategist, mid and small cap valuations had (prior) reach “unsustainable levels”.

What is outlook for the near-term?

Tightening of trade policies with the probability of a trade war under Trump, geopolitical tensions and slowing global growth could influence markets going forward. According to Mr. Vijaykumar, “FIIs will return to India, only the timing is uncertain.” He further adds, “Indications of a growth and earnings recovery in India and dollar decline — we do not know when it will happen, will make FIIs buyers in India.” Additionally, Mr. Vakil holds that deep uncertainty about President Trump’s tariffs plans may keep investors on the “defensive”. As for the outflow, he contends SIP flows are likely to remain strong and should be able to absorb bulk of the selling.

Benchmark indices Sensex and Nifty were trading in the positive territory on Friday (February 7, 2025) after the RBI under new Governor Sanjay Malhotra cut interest rate for the first time in nearly five years.

The 30-share BSE benchmark Sensex traded 233.96 points higher at 78,290.08 in the late morning trade. The NSE Nifty quoted 83.40 points up at 23,686.75.

From the 30-share blue-chip pack, Bharti Airtel’s stock surged nearly 5% after the firm reported a more than five-fold jump in consolidated net profit to ₹16,134.6 crore boosted by consolidation of the Indus Tower business and benefits of tariff hikes flowing into the quarter.

Tata Steel, NTPC, Mahindra & Mahindra and Zomato were the other gainers.

The stock of ITC declined nearly 2% after the diversified entity reported a 7.27% decline in consolidated net profit to ₹5,013.16 crore for the December quarter on account of subdued demand and sharp escalation in input costs.

State Bank of India, Tata Consultancy Services, Nestle, ICICI Bank and PowerGrid were also among the laggards.

Interest rate sensitive realty and auto stocks were trading in the positive territory.

The RBI under new Governor Sanjay Malhotra on Friday cut interest rate for the first time in nearly five years as the central bank pivoted the policy stance to support a shuttering economy.

The 25 basis points rate cut to 6.25% comes after last rate reduction in May 2020. The last revision of rates happened in February 2023 when the policy rate was hiked by 25 basis points to 6.5%.

The Monetary Policy Committee (MPC) unanimously decided to slash policy rate by 25 basis points to 6.25%, Mr. Malhotra said.

The interest rate cut comes within a week of Finance Minister Nirmala Sitharaman in Budget 2025-26 providing biggest ever tax break to the middle class to boost consumption after the economy has slowed to its lowest pace since the pandemic.

“In a landmark decision, the Reserve Bank of India (RBI)’s Monetary Policy Committee has reduced the benchmark interest rate by 25 basis points, the first cut in five years, aiming to stimulate economic growth while closely monitoring inflation. This move aligns with global central banks, which have been easing rates since last year to counter economic slowdowns.

“However, this decision is expected to widen the gap between U.S. and Indian bond yields, potentially accelerating capital outflows from India. With US bond yields on an upward trajectory, the Indian Rupee (INR) is facing added depreciation pressure, exacerbating currency risks. Given these challenges, the rate cut could prove to be a balancing decision on currency stability and stimulating consumption,” Umeshkumar Mehta, CIO, SAMCO Mutual Fund, said.

In Asian markets, Seoul and Tokyo were quoting lower while Hong Kong traded in the positive territory.

U.S. markets ended mostly higher on Thursday.

“A rate cut that was widely anticipated and priced in was delivered by the RBI MPC. Policy rate reduction was clearly a question of timing in the current context considering the evolving situation on the currency led by global factors and capital flows,” Rajeev Radhakrishnan, CIO – Fixed Income, SBI Mutual Fund, said.

Global oil benchmark Brent crude climbed 0.51% to USD 74.68 a barrel.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,549.95 crore on Thursday, according to exchange data.

On Thursday, the BSE bellwether gauge dropped 213.12 points or 0.27% to settle at 78,058.16. The Nifty declined 92.95 points or 0.39% to 23,603.35.

From the 30-share Sensex pack, Mahindra & Mahindra, Tata Steel, Adani Ports, JSW Steel, IndusInd Bank, Reliance Industries, HDFC Bank and Kotak Mahindra Bank were the biggest laggards. 
| Photo Credit: Reuters

Equity investors suffered an erosion of ₹13 lakh crore in market valuation in two days of crash in the BSE benchmark Sensex which lost more than 2% during this period.

“Retail inflation soaring to a 14-month high of 6.21% in October, unabated foreign fund outflows and muted quarterly earnings are the major reasons behind the heavy correction in the markets,” traders said.

The BSE benchmark Sensex tanked 1,805.2 points or 2.27% in two days. On Wednesday (November 13, 2024), it slumped 984.23 points or 1.25% to settle at 77,690.95.

The market capitalisation of BSE-listed companies eroded by ₹13,07,898.47 crore to ₹4,29,46,189.52 crore ($5.09 trillion) in two days. Retail inflation breached the Reserve Bank’s upper tolerance level, soaring to a 14-month high of 6.21% in October mainly on account of rising food prices.

“With inflation once again rising sharply and breaching above the RBI’s comfort level, receding hopes of any major rate cuts in the near future by the central bank put the markets into a tizzy.”

“Also, relentless FII selling in local equities, along with rising U.S. bond yields and dismal corporate earnings show has prompted overseas investors to park their funds in relatively cheaper markets like China,” Prashanth Tapse, Senior VP (Research) at Mehta Equities Limited, said.

From the 30-share Sensex pack, Tata Steel, Mahindra & Mahindra, Adani Ports, State Bank of India, JSW Steel, HDFC Bank, IndusInd Bank, Kotak Mahindra Bank, Reliance Industries and Bajaj Finserv were the biggest laggards. NTPC, Tata Motors and Infosys were the gainers.

Foreign Institutional Investors (FIIs) offloaded equities worth ₹3,024.31 crore on Tuesday (November 12, 2024), according to exchange data. The BSE smallcap gauge tanked 3.08% and midcap slumped 2.56%.

All sectoral indices ended lower. Realty tumbled 3.23%, industrials (2.95%), capital goods (2.72%), services (2.54%), metal (2.54%) and commodities (2.45%). A total of 3,299 stocks declined while 670 advanced and 98 remained unchanged on the BSE.

“Nifty has experienced its first significant correction in terms of both time and price since March 2023. This sell-off was sparked by China’s new stimulus package, which has diverted FII flows from India to China. Additionally, weaker-than-expected Q2 earnings from Indian companies, particularly in the consumption sector, have further intensified FII selling, leading to record outflows from Indian equities over the past month and a half.

“Adding to these pressures are rising U.S. bond yields and a strengthening dollar index, both of which pose challenges for emerging markets like India,” Santosh Meena, Head of Research at Swastika Investmart Limited, said.

The BSE benchmark Sensex fell by 424.42 points to 79,117.37 in early trade. The NSE Nifty declined 132.7 points to 24,066.65. File
| Photo Credit: Reuters

The Sensex and Nifty fell in early trade on Friday (November 8, 2024) amid continuous foreign fund outflows and weak trends in blue-chip stocks Reliance Industries and ICICI Bank.

Market watchers said the Indian market is likely to trade sideways till clarity emerges on corporate earnings, a pickup in consumption and foreign fund flows.

Meanwhile, the U.S. Fed has cut rates for two straight meetings as the inflation print has been comfortable.

“However, India, on the other hand, is facing sticky food inflation but also lower growth possibilities,” they said.

The RBI will be meeting next month to unveil their monetary policy meeting. The BSE benchmark Sensex fell by 424.42 points to 79,117.37 in early trade. The NSE Nifty declined 132.7 points to 24,066.65.

From the 30-share Sensex pack, Tata Motors, Reliance Industries, Asian Paints, Maruti, NTPC and ICICI Bank were the biggest laggards.

Infosys, Tech Mahindra, HCL Technologies, Titan, Kotak Mahindra Bank and HDFC Bank were among the gainers.

Foreign Institutional Investors (FIIs) offloaded equities worth ₹4,888.77 crore on Thursday (November 7, 2024), according to exchange data.

“Two divergent trends are evident in the market now: one, strength in the global market led by the US and two, weakness in the Indian market. The weakness in the Indian market can be attributed largely to the relentless selling by FIIs, which continues this month, too,” V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said.

In Asian markets, Seoul and Tokyo were trading in the positive territory while Shanghai and Hong Kong quoted lower.

Wall Street ended mostly higher on Thursday (November 7, 2024).

“The Federal Reserve has cut its benchmark interest rate by 25 basis points to 4.50% – 4.75%, following earlier rate reductions to address inflation. Meanwhile, Nifty shows limited movement amid persistent FII selling,” Prashanth Tapse, Senior VP (Research) at Mehta Equities Limited, said.

Global oil benchmark Brent crude declined 0.71% to $75.09 a barrel.

The BSE benchmark tanked 836.34 points, or 1.04%, to settle at 79,541.79 on Thursday (November 7, 2024). The Nifty dropped 284.70 points, or 1.16%, to finish at 24,199.35.

Image for representative purposes only
| Photo Credit: Reuters

Benchmark Sensex tanked nearly 942 points to settle at a three-month low while Nifty tumbled more than 1% to close below 24,000 on Monday (November 4, 2024) dragged down by heavy selling in Reliance Industries and banking shares.

The 30-share BSE Sensex tumbled 941.88 points or 1.18% to settle at 78,782.24, the lowest closing level since August 6. During the day, it slumped 1,491.52 points or 1.87 per cent to 78,232.60. The NSE Nifty tanked 309 points or 1.27% to 23,995.35.

Uncertainty ahead of the U.S. Presidential elections on November 5 and expectations of a fresh stimulus package by China to prop up growth triggered selling in Indian stocks, analysts said. Relentless selling by foreign investors also dampened the sentiments in the equity market.

Watch: How are elections conducted in the U.S?

From the 30-share Sensex pack, Adani Ports, Reliance Industries, Sun Pharma, Bajaj Finserv, NTPC, Tata Motors, Axis Bank and Titan were among the major laggards. Mahindra & Mahindra, Tech Mahindra, State Bank of India, HCL Technologies, Infosys and IndusInd Bank were the gainers.

Foreign institutional investors (FIIs) offloaded equities worth ₹211.93 crore on Friday (November 1, 2024,) according to exchange data.

Foreign investors pulled out a massive ₹94,000 crore (around $11.2 billion) from the Indian stock market in October, making it the worst-ever month in terms of outflows, triggered by the elevated valuation of domestic equities and attractive valuations of Chinese stocks.

A committee of China’s National People’s Congress is meeting this week triggering speculation that the government may endorse major spending initiatives to boost the economy.

In Asian markets, Seoul, Shanghai and Hong Kong settled higher. European markets were trading mostly higher. The U.S. markets ended in positive territory on Friday (November 1, 2024.) Global oil benchmark Brent crude climbed 2.57% to $74.98 a barrel.

Leading stock exchanges BSE and NSE conducted a one-hour special ‘Muhurat Trading’ session on the occasion of Deepavali on November 1, marking the start of the new Samvat 2081.

The BSE benchmark climbed 335.06 points or 0.42% to settle at 79,724.12 in the special Muhurat trading session on Friday (November 1, 2024.) The Nifty advanced 99 points or 0.41% to 24,304.35.

From the 30-share Sensex pack, Infosys, ICICI Bank, Kotak Mahindra Bank, Mahindra & Mahindra, State Bank of India, HCL Technologies, Axis Bank, NTPC and HDFC Bank were among the laggards.
| Photo Credit: Reuters

Benchmark equity indices Sensex and Nifty declined on Wednesday (October 30, 2024), dragged down by banking and financial stocks amid weak trends in global markets.

“Besides, weak earnings numbers and persistent foreign fund outflows impacted market sentiments,” traders said. The BSE Sensex tumbled 426.85 points or 0.53% to settle at 79,942.18. The NSE Nifty dropped 126 points or 0.51% to 24,340.85.

From the 30-share Sensex pack, Infosys, ICICI Bank, Kotak Mahindra Bank, Mahindra & Mahindra, State Bank of India, HCL Technologies, Axis Bank, NTPC and HDFC Bank were among the laggards.

In contrast, Maruti, IndusInd Bank, Adani Ports, ITC and UltraTech Cement defied broader market trends and ended in positive territory. Foreign institutional investors (FIIs) were net sellers in the capital markets on Tuesday, as they offloaded shares worth Rs 548.69 crore, according to exchange data.

“In the near term, the market will be influenced by two factors – one positive and the other negative. The positive is the sharp decline in FII selling to just Rs 548 crore on Tuesday. This is an indication that the FII tactical trade of ‘Sell India, Buy China’ is coming to an end.

“With more Domestic Institutional Investors (DII) and retail money coming to the market and FII selling tapering off, the market may get a near-term boost, aided by the festive mood. But the uptrend is unlikely to sustain since the Q2 earnings numbers indicate softness in earnings for FY25,” VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said.

In Asian markets, Seoul, Shanghai and Hong Kong settled lower, while Tokyo ended in the positive territory. European markets were trading lower. The US markets ended on a mixed note on Tuesday. Global oil benchmark Brent crude climbed 0.63 per cent to USD 71.57 a barrel.

The BSE benchmark climbed 363.99 points or 0.45 per cent to settle at 80,369.03 on Tuesday. The Nifty rose 127.70 points or 0.52 per cent to 24,466.85.

From the 30 Sensex firms, Power Grid, ICICI Bank, Bharti Airtel, HDFC Bank, Kotak Mahindra Bank, Larsen & Toubro, Adani Ports and UltraTech Cement were among the laggards.
| Photo Credit: Reuters

Benchmark stock indices Sensex and Nifty retracted from lifetime highs to settle lower on Friday (September 27, 2024) due to profit-taking in frontline stocks HDFC Bank and ICICI Bank.

The BSE Sensex declined 264.27 points or 0.31% to settle at 85,571.85. During the day, it climbed 142.13 points or 0.16% to reach a new record intra-day peak of 85,978.25.

The NSE Nifty dipped 37.10 points or 0.14% to 26,178.95 after rising 61.3 points or 0.23% to an all-time intra-day high of 26,277.35 during the day.

From the 30 Sensex firms, Power Grid, ICICI Bank, Bharti Airtel, HDFC Bank, Kotak Mahindra Bank, Larsen & Toubro, Adani Ports and UltraTech Cement were among the laggards.

Sun Pharma, Reliance Industries, Titan, HCL Technologies and Bajaj Finserv were among the biggest gainers.

“Following the recent impressive surge, the benchmark indices experienced a sideways movement today as investors engaged in profit booking at elevated levels,” Vinod Nair, Head of Research, Geojit Financial Services said.

In Asian markets, Tokyo, Shanghai, and Hong Kong settled sharply higher while Seoul ended lower. European markets were trading in the green. The U.S. markets ended in positive territory on Thursday (September 26, 2024.)

Foreign Institutional Investors (FIIs) turned buyers on Thursday (September 26, 2024) as they bought equities worth ₹629.96 crore, according to exchange data. Domestic Institutional Investors (DIIs) also bought equities worth ₹2,405.12 crore. Global oil benchmark Brent crude dipped 0.03% to $71.58 a barrel.

The BSE benchmark jumped 666.25 points or 0.78% to settle at an all-time high of 85,836.12 on Thursday (September 26, 2024.) During the day, it reached a record intra-day peak of 85,930.43, surging 760.56 points or 0.89%.

The Nifty climbed 211.90 points or 0.81% to close at a record high of 26,216.05. During the day, it soared 246.75 points or 0.94% to hit a fresh intra-day lifetime peak of 26,250.90.

In a range-bound trade, the 30-share BSE Sensex gained for the second day in a row, rising 102.44 points or 0.13% to close at 80,905.30. 
| Photo Credit: Reuters

Equity benchmark indices Sensex and Nifty closed higher on Wednesday (August 21, 2024), helped by gains in FMCG, consumer durables and health-care stocks amid strong buying support from domestic institutional investors.

“However, recent foreign capital outflows amid a cautious trend in global equities ahead of the release of U.S. Fed minutes restricted the gains in domestic markets,” traders said.

In a range-bound trade, the 30-share BSE Sensex gained for the second day in a row, rising 102.44 points or 0.13% to close at 80,905.30. During the day, it rose 149.97 points or 0.18% to hit an intra-day high of 80,952.83.

Rising for the fifth straight session, the NSE Nifty went up by 71.35 points or 0.29% to end at 24,770.20.

“The Indian market traded on a tight range with a positive bias supported by strong DII flows. While defensive sector outperformed due to a continued shift in portfolio towards FMCG, consumer, commodities, and pharma.

“Global markets exhibited a mildly cautious tone ahead of the release of the FOMC minutes later today. Currently, the expectation of a rate cut remains high, given the fall in U.S. inflation and moderation in overall growth,” Vinod Nair, Head of Research, Geojit Financial Services, said.

Among the Sensex firms, Titan, Asian Paints, ITC, Hindustan Unilever, Nestle India, Bajaj Finserv and Bharti Airtel were among the gainers.

In contrast, UltraTech Cement, Tech Mahindra, Tata Steel, Power Grid, HDFC Bank, HCL Technology, State Bank of India and ICICI Bank were the laggards. The European markets were trading higher on August 21, 2024.

In Asian markets, Tokyo, Shanghai and Hong Kong were closed in the negative territory while Seoul ended higher on Wednesday. The U.S. stock markets settled lower in overnight trade on August 20, 2024.

Foreign Institutional Investors (FIIs) again turned sellers on Tuesday as they offloaded equities worth ₹1,457.96 crore, according to exchange data. Domestic Institutional Investors (DIIs) bought equities worth ₹2,252.10 crore on Tuesday. Global oil benchmark Brent crude rose 0.28% to ₹77.42 a barrel.

The 30-share BSE Sensex rebounded 378.18 points or 0.47% to settle at 80,802.86. Rising for the fourth consecutive session, the NSE Nifty surged 126.20 points or 0.51% to 24,698.85.