Indian equity benchmarks post 2nd weekly decline on earnings, FPI selling

Indian equity benchmarks posted their second consecutive weekly decline amid concerns about corporate earnings and selling by foreign portfolio investors (FPIs).

 

The Sensex ended the session on Friday at 76,619, a decline of 424 points or 0.5 per cent. Meanwhile, the Nifty closed at 23,182, a drop of 130 points or 0.6 per cent.

 

For the week, both indices declined by 1 per cent, the longest weekly losing streak since the seven days ended November 17, 2024. 

 

The broader Nifty Midcap 100 and the Nifty Small Cap 100 gained 0.2 per cent each.

 

The total market capitalisation of BSE-listed firms gained by Rs 31,400 crore and was trading at Rs 429 trillion.

 

Infosys, ICICI Bank and Axis Bank largely contributed to the index decline on Friday.

 

Infosys, which fell 5.7 per cent, was both the biggest contributor to Sensex losses as well as the worst-performing Sensex stock. Infosys’ decline on Friday was its biggest single-day fall since November 18.

 

Though the software major raised its revenue guidance for FY25, analysts raised concerns about the quality of its earnings.

 

Axis Bank, which declined 4.7 per cent, was the second worst-performing Sensex stock and the third biggest contributor to Sensex decline. This comes after it reported a rise in loan-loss provisions due to an uptick in fresh slippages. 

 

Reliance Industries, which rose 2.6 per cent after its net profit for the December quarter beat estimates, was the biggest contributor to the Sensex gains.

 

HSBC Global Research, which upgraded the stock to ‘buy’ from ‘hold’, said there may be potential catalysts in the form of a turnaround in retail, the start of new energy business and a pick-up in momentum of the company’s digital business.

 

Earnings concerns, FPI selling and uncertainty about the impact of US policy shifts and the trajectory of rate cuts after Donald Trump takes over have led to a sell off in equities since October.

 

FPIs on Friday were net sellers worth Rs 3,318 crore, and domestic institutions were buyers worth Rs 2,573 crore.

 

So far this month, FPIs have been net sellers worth 42,499 crore.

 

“Domestic equities are expected to remain volatile with stock-specific action as the corporate earnings season for the third quarter is in full swing. Investors will closely track the December quarter results together with management commentary. Trump's swearing-in as the 47th President of the US on Monday, and the following policy announcements will have a strong impact on global market sentiment,” said Siddharth Khemka, head of research, wealth management, Motilal Oswal Financial Services.

 

Market breadth was mixed on Friday, with 1,991 stocks advancing and 1,955 declining on BSE. Half the Sensex stocks declined. The remaining earnings season and policy shifts in the US will determine market trajectory. Investors will also be tracking the Budget next month.

 

“Declines in the banking and IT sectors negatively impacted largecaps, causing domestic markets to end lower following a volatile session. We expect investors to adopt a risk-averse stance on the ongoing Q3 results,” said Vinod Nair, head of research at Geojit Financial Services.