Stock indices in India closed the week’s trade marginally in the red, after logging sixth straight session highs. Sensex nearly reached 86,000 points at one point before closing at 85,571.85 points, down 0.31 percent. Nifty also closed lower at 26,175.15 points, down 0.16 percent. Among sectoral indices, bank, financial services, media, and realty were the top losers according to NSE data. The sideways movement in the benchmark indices was attributed to profit booking by investors who had earlier witnessed impressive surges.
Vinod Nair, Head of Research at Geojit Financial Services, stated that investors are eagerly awaiting the Q2 earnings report, anticipating an improvement in the earnings outlook. The US Federal Reserve’s decision to loosen interest rates by a steep 50 basis points had also been providing fresh support to Indian stocks. Loosening monetary policy in the US leads to a flight of capital to markets with high policy rates, such as India. Continued buying by foreign portfolio investors (FPIs) also supported the stock indices, with FPIs increasing their investments in India in September.
FPIs have been net buyers for the fourth consecutive month, with investments totaling Rs 488,22 in stocks in India. Sectors that previously saw heavy participation, such as Public Sector Banks, Defence, and Railways, are now being overshadowed by underperformers like Pharma, Private Banks, and mid-size IT. These sectors, with their attractive valuations, are likely to lead the next market phase in the coming quarters, according to Krishna Appala, Senior Research Analyst at Capitalmind Research.
Overall, the stock market in India experienced a slightly negative trend at the end of the week’s trading. Profit booking, anticipation of Q2 earnings reports, and support from the US Federal Reserve’s interest rate cuts were key factors impacting the market. The increased investment by foreign portfolio investors and the shift in focus towards underperforming sectors with attractive valuations are expected to shape the market in the upcoming quarters. Investors will closely monitor earnings reports and global economic trends to make informed decisions and capitalize on potential opportunities in the market.
