FPIs selling crosses $10 b in October

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Foreign portfolio investors (FPIs) continued their record selling spree, offloading shares worth ₹5,684 crore on Wednesday. This takes the total selloff for the month of October to $10.61 billion, data from NSDL showed.

The early rally in IT stocks was quickly erased by a sharp sell-off in financials, leading to a muted close for Indian markets on Wednesday. The Nifty 50 slipped 0.15 per cent to end at 24,436, while the Sensex slid 0.16 per cent to end at 80,090. Despite a brief recovery, 32 out of the 50 Nifty constituents finished the day in the red.

Broader markets outperformed with Midcap and Smallcap indices gaining 0.7 per cent and 1.3 per cent respectively. It was a mixed bag on the sectoral front. IT Index gained 2.4 per cent after mid-cap stocks such as Persistent Systems and Coforge reported strong Q2 results, while pharma and healthcare lost over 1 per cent each.

Nifty and Sensex are down 5.8 per cent and 5.7 per cent this month.

Weighing down

“Market sentiment was weighed down by expensive valuations, tepid Q2 earnings, geopolitical tensions in West Asia and uncertainty surrounding the US elections,” said Vikram Kasat, Head – Advisory, PL Capital – Prabhudas Lilladher.

He added that companies missing earnings estimates faced sell-offs, while those exceeding expectations saw their stock prices hit fresh highs.

The IMF on Tuesday kept its growth forecasts for India unchanged at 7 per cent and 6.5 per cent for FY25 and FY26 respectively, which is a positive for the Indian markets.

Global markets remained under pressure amid a rising dollar, lower global growth forecast by the IMF, uncertainty around the US elections, rising geopolitical tensions and the prospect of a less aggressive US Fed in cutting rates.

According to analysts, 24,378 will serve as crucial short-term support for the Nifty. A break below 24,370 could take the index lower towards the 24,200-24,000 levels.

“On the daily chart, Nifty formed an inverted hammer candle, which occurred after the breakdown of a head and shoulder pattern. This candlestick formation typically indicates strength. Traders are advised to use any bounce to book profits, considering the overall weakness,” said Hrishikesh Yedve, AVP – Technical and Derivatives Research at Asit C. Mehta Investment Intermediates.