Mumbai : Investors' sentiment was dampened as foreign fund outflows and disappointing earnings from Hindustan Unilever caused equity markets to drop after an initial rally on Thursday. In the early trading session, the BSE Sensex gained 177.84 points and reached 80,259.82. The NSE Nifty increased by 45.15 points, reaching 24,480.65. Nevertheless, the benchmark indices quickly encountered selling pressure and began trading at lower levels. The BSE main index was 219.12 points below at 79,862.86 while the Nifty was 74 points lower at 24,361.50.
Hindustan Unilever, a member of the 30 Sensex pack, saw a drop of more than 5 per cent in its stock price following the FMCG company's announcement of a 2.33 per cent decrease in consolidated net profit to Rs 2,595 crore for the second quarter ending in September 2024 due to reduced demand from urban areas. Nestle, Bharti Airtel, Bajaj Finserv, ICICI Bank, and Maruti were among the major underperformers. HDFC Bank, Mahindra & Mahindra, UltraTech Cement, Sun Pharma, Power Grid and HCL Tech were some of the companies that saw an increase in value. According to exchange data, Foreign Institutional Investors (FIIs) sold equities worth Rs 5,684.63 crore on Wednesday. DIIs purchased equities totaling Rs 6,039.90 crore. The biggest challenge the market is currently dealing with is the significant, unparalleled, and continuous FII selling, totaling Rs 93,088 crore according to NSDL data until 23rd October. The main reason for the FII outflows is the high prices in India compared to the lower and appealing prices in countries such as China and Hong Kong.
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Vk Vijayakumar, Chief Investment Strategist at Geojit Financial Services, mentioned that a rise in the market does not align with a decrease in earnings growth, resulting in selling at every increase and leading to a current market structure of 'sell on rally'. Tokyo's market increased in Asian trading, while Seoul, Shanghai, and Hong Kong experienced declines. Wednesday saw the US markets close in the red. The positivity in our markets has come to a halt following a challenging trading session, similar to a kite caught on a tree branch. The Nifty has closed in the negative for three straight days. Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, stated that various reasons are limiting the bullish outlook, including underwhelming Q2 earnings from Indian companies, ongoing selling by FIIs, worries about the speed of US interest rate reductions, and increasing US bond yields. Brent crude, the worldwide oil standard, surged by 1.25 percent to reach USD 75.90 per barrel.
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