Mkts log worst fall in over a month; 1st 4-week losing streak since Oct 24

Cap fourth straight weekly loss, marking the longest streak since October, as earnings disappoint and FPI selling persists

Domestic equities fell on Friday, with benchmark indices posting their biggest fall in over a month and logging their worst weekly losing streak in nine months since October 2024. Earnings disappointment, sustained selling from foreign portfolio investors (FPIs), and uncertainty surrounding the trade deal with the US weighed on sentiment. 

The Sensex ended the session at 81,463, with a decline of 721 points, or 0.9 per cent. The Nifty50 index ended the session at 24,837, down 225 points, or 0.9 per cent. This was the biggest single-day fall for both the indices since June 19. 

For the week, Sensex declined by 0.4 per cent and Nifty by 0.5 per cent, marking the fourth consecutive weekly loss for both indices. The last time both indices posted a four-week losing streak was in the week ended October 25, 2024. 

The total market capitalisation of BSE-listed firms declined by ₹6.4 trillion, reaching ₹452 trillion.

 

Infosys, which declined by 2.4 per cent, and Bajaj Finance, which fell by 4.7 per cent, were the biggest contributors to the Sensex decline.

 

Bajaj Finance, which posted its biggest single-day fall since April 30, was the worst-performing Sensex stock as concerns over its worsening asset quality and high credit costs overshadowed strong loan growth. Other Bajaj group stocks also posted sharp losses. 

 

The decline in Infosys was attributed to the broader selloff in the information technology (IT) sector amid disappointment over tepid revenue and profit growth, making the current valuations unjustifiable.

 

The selloff did not even spare the beneficiaries of the India-UK trade deal, with many stocks in the textile, aquaculture, and automotive sectors declining.

 

"A favourable deal with the UK was expected and was priced in, hence the signing was not a surprise. Moreover, the India-UK deal is one part of the puzzle. One has to see how an India-US trade deal shapes up, and what kind of concessions India's export competitors get from the US and EU," said Chokkalingam G, cofounder of Equinomics.

 

FPIs continued to be net sellers of equities worth ₹1,980 crore, and domestic institutional investors (DIIs) were net buyers to the tune of ₹2,139 crore. So far this month, FPIs have pulled out over ₹20,000 crore from the domestic markets while DIIs have pumped in nearly ₹40,000 crore.

 

The market breadth was weak, with 2,969 stocks declining and 1,061 advancing. The broader Nifty Midcap 100 fell by 1.6 per cent, and the Nifty Smallcap 100 by 2.1 per cent.

 

"There is a bit of profit-booking after the recovery from the April lows. However, the delay in the trade deal with the US is causing the biggest jitters in the markets. Investors are concerned about whether IT services will be impacted by tariffs," said Chokkalingam.

 

In the future, corporate results and trade deal with the US are expected to determine the market trajectory.

 

"Elevated valuations in largecap stocks, coupled with significant net short positions held by FPIs, added to the downward pressure. Moderation in DII inflows after the strong buying of the last two-three months — due to a muted earnings season and persistent FPI selling — continues to impact the current market," said Vinod Nair, head of research at Geojit Investments.