The poor string of corporate results and rampant selling by foreign portfolio investors (FPIs) knocked 663 points off the Sensex, which closed below the 80000-level on Friday.
IndusInd Bank was the worst hit, plunging more than 18 per cent after its net profit fell 39 per cent for the quarter ended September 30, 2024.
Provisional data from the stock exchanges showed FPIs selling stocks worth more than ₹3,000 crore on Friday.
So far, they have offloaded stocks worth ₹85,790 crore in October according to NSDL data.
The selloff has been attributed to expensive valuations and outflows to other markets such as China where prices are reasonable with its central bank taking steps to prop up growth.
In India, muted corporate results have compounded the concerns around pricey valuations, leading to the sell-off.
Analysts said events such as the US Presidential elections and the US Federal Reserve meeting next month would decide the course of the markets.
They expect the activities will now be confined to select stocks based on their results.
Some analysts pointed out that stocks have entered oversold territory, and there could be consolidation from hereon.
Tracking the weak sentiment, the BSE Sensex tanked 662.87 points to settle at 79402.29. During the day, it plunged 927.18 points, or 1.15 per cent, to 79137.98. On the NSE, the Nifty crashed 218.60 points to 24180.80.
IndusInd Bank was the top loser in the Sensex group, followed by Mahindra & Mahindra, Larsen & Toubro, NTPC, Adani Ports, Tata Steel, Maruti, Bajaj Finance and Titan, which fell up to 3.93 per cent.
On the winning side, ITC climbed more than 2 per cent after the company reported an 1.8 per cent increase in its consolidated net profit in the second quarter. Axis Bank, Hindustan Unilever, Sun Pharma and ICICI Bank were the other big gainers.
The BSE midcap index fell 1.48 per cent and the small cap index2.44 per cent.
“The Indian equity market is experiencing a sharp correction due to multiple factors. The primary driver is foreign institutional selling, driven by valuation concerns and the increased attractiveness of the Chinese market,” Santosh Meena, head of research at Swastika Investmart, said.
“Another major factor is disappointing earnings reports from Indian companies, especially in the consumption sector, which signal an economic slowdown, particularly in urban consumption. This slowdown is also impacting financial stocks.
“Additionally, we are now seeing selling pressure from many HNIs and retail investors, who haven’t experienced a correction of this depth for some time,’’ Meena said.
“Though a bounce in the markets is overdue, it needs reversal of selling pressure from FPIs and some sentiment stability in the local investor community,’’ Deepak Jasani, head of retail research at HDFC Securities, said.
