Indices fall for 6th straight session amid FPI selloff

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Indian equities fell for a sixth straight session amid tensions in West Asia and sustained selling by foreign investors, even as other Asian indices ended firmly in the green.

Benchmark indices surged higher in early trade but erased gains soon after. The Sensex ended 638 points or 0.78 per cent lower at 81,050. The Nifty settled 0.87 per cent lower at 24,795, posting its worst six-day fall since March 2022.

Cash market volumes on the NSE were flat compared to the previous session. The broader market underperformed, with the Nifty Midcap 100 down 1.9 per cent and the Nifty Smallcap 100 down 2.5 per cent. Except for the IT sector, all sectors ended in the red, with PSU Bank, Oil & Gas, and Metals being the top losers, each down 2-3 per cent.

Under pressure

“Optimism from a stronger-than-expected US jobs report initially gave domestic equities a boost. However, selling by foreign institutional investors along with rising crude oil prices, has negatively impacted sentiment. We expect the market to remain under pressure in the near term until FPI selling subsides,” said Siddhartha Khemka, Head, Research, Wealth Management, Motilal Oswal Financial Services.

FPIs sold shares worth ₹8,293 crore on Monday, taking their monthly selling to over ₹36,000 crore.

“Monday’s decline was fuelled by negative global cues, weak international indices, and growing concerns over the BJP’s electoral setbacks in two States, which has led to profit booking ahead of the Maharashtra elections. Geopolitical tensions and anticipation of the Reserve Bank of India’s monetary policy decisions further contributed to the bearish sentiment,” said Vikram Kasat, Head – Advisory, PL Capital – Prabhudas Lilladher.

The market will look to the RBI policy outcome and the beginning of the Q2FY25 earnings season for further cues. Asian markets rose on Monday after a blockbuster US jobs report pointed toward a stable economic outlook and soothed any concerns about the world’s top economy. Japan’s Nikkei 225, Hang Seng and Taiwan Weighted were the top gainers.

“A long bear candle was formed on the daily chart, which is indicating a continuation of steep downside momentum. The positive chart pattern like higher tops and bottoms on the daily chart seems to have negated by Nifty moving below the last higher bottom of 24,753 levels on Monday. Hence, this market action indicates that any upside bounces from here or from the lows could be short lived and that could possibly form a new lower top,” said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.