The Indian markets wrapped up the last trading day of October in negative territory, with a sharp sell-off in IT and FMCG stocks pulling the front-line indices lower. Although there was some support from the pharma sector, it was insufficient to lift the markets higher.
Consequently, the Nifty 50 concluded today’s session on October 31 with a 0.45% decline, settling at 24,238, while the Sensex dropped by 0.64% to finish at 79,429. Meanwhile, the broader market displayed mixed performance, as the Nifty Midcap 100 index tumbled 0.41%, whereas the Small Cap 100 index gained over 1.16%.
Among the sectoral indices, the Nifty IT index faced a significant downturn, plunging by 2.87%. All constituents of the index ended in the red following Capgemini’s earnings report, which included a downward revision of its revenue growth estimates for the year ending in December, adversely impacting investor sentiment towards the IT sector. The Nifty IT index concluded October with a total drop of 3.67%.
After a brief rally in recent sessions, the Nifty FMCG index also came under considerable selling pressure, ending the day by 1%. It wrapped up October with a substantial decline of 10%, marking its largest monthly drop in the past six years.
On the other hand, banking stocks continued their weak performance for the second consecutive trading session, with the Nifty Bank losing another 0.64% after a 1% drop in the previous session, culminating in a 2.84% decline for October.
In contrast, Nifty Pharma concluded the day with a robust gain of 1.61%, driven primarily by Cipla, which surged nearly 9%. However, the index finished October in negative territory, recording a drop of 2.34%.
Nifty 50 tumbles over 6% in October
The Nifty 50 concluded October with a notable drop of 6.22% to 24,207 points, marking its largest monthly decline since March 2020, when it plummeted 23.25% amid the COVID-19 pandemic. This sell-off has led the index to correct 8% from its peak of 26,277, reached in late September.
Dr V K Vijayakumar, Chief Investment Strategist, at Geojit Financial Services, said, “India’s underperformance is driven by lofty valuations, relentless FII selling, and concerns over slowing earnings growth. In the near term, this scenario is unlikely to change, reversing the trend decisively, even though mild pullbacks are possible.”
“A significant trend in the market is the strong stock-specific action. Better-than-expected results are responded to with sharp moves up to 20% a day, while worse-than-expected results are met with around 15% correction. This trend of strongly rewarding good results and punishing poor results equally strongly is a reflection of the focus on stock-specific action rather than the focus on the benchmark indices and market as a whole. Given the elevated valuations and the possibility of continuing FII selling, stocks and sectors that have delivered good results and good guidance are likely to remain resilient. Investors should focus on these segments,” he further added.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.
