Benchmark stock indices in India continued their downward trend on Monday, with the Sensex and Nifty marking their seventh consecutive session of losses and hitting new multi-month lows. The Sensex closed at 77,339.01 points, down 241.30 points or 0.31%, while the Nifty finished at 23,453.80 points, a decline of 78.90 points or 0.34%.
Sectoral Losses and Weak Earnings Growth Impact Market
Among the sectoral indices, the Nifty IT, Media, and Oil and Gas sectors saw the most significant losses, while the Metal, PSU Bank, and Realty sectors posted some gains. According to Vinod Nair, Head of Research at Geojit Financial Services, the market is experiencing consolidation due to factors like a slowdown in earnings growth, inflationary pressures weakening the rupee, and a reduced expectation of a U.S. Federal Reserve rate cut in December. This, he said, has especially affected IT stocks, as it could delay spending in the BFSI (Banking, Financial Services, and Insurance) sector.
Weak Q2 Earnings and Rising Inflation Weigh on Investor Sentiment
The continued slump in the indices is attributed to a mix of factors, including weaker-than-expected Q2 earnings, sustained foreign fund outflows, and the impact of rising domestic inflation, both retail and wholesale. Shrikant Chouhan, Head of Equity Research at Kotak Securities, believes that while the market remains weak, it is oversold and could experience a short-term pullback rally.
Looking ahead, Ajit Mishra, Senior Vice President of Research at Religare Broking, advises investors to maintain a cautious outlook on the broader index while focusing on selective stock-specific opportunities.
The Indian stock markets were closed on Friday for Guru Nanak Dev Jayanti, adding a break to the ongoing negative momentum.
