Noida, Oct 12 (APAC Media): Indian stock markets witnessed renewed selling pressure on Monday as the Sensex and Nifty gave up their early gains amid profit booking and persistent investor uncertainty.
Investor sentiment weakened further amid concerns over the RBI’s recent measures, sustained foreign fund outflows and heightened volatility in the financial markets.
At 11:17 am, the BSE Sensex had dropped 468.77 points, or 0.65%, to 72,003.56.
Meanwhile, the NSE Nifty 50 slipped 110.65 points, or 0.49%, to 22,409.80. The Sensex retreated nearly 900 points from its intraday peak, while the Nifty moved closer to the key 22,400 level.
Profit booking puts pressure on benchmarks
The latest decline was largely driven by investors selling shares to secure profits after the market’s recovery in the previous trading session. On October 9, the Nifty had climbed 288.65 points, or 1.30%, to close at 22,520.45, supported by buying at lower levels.
However, the subsequent weakness indicates that market participants remain uncertain about the sustainability of the recovery.
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Pabitro Mukherjee, Deputy Vice President–Research at Bajaj Broking, noted that the rebound following an eight-week losing streak was a positive development.
However, he cautioned that the limited weekly gains were not enough to establish a lasting recovery.
According to the assessment, a stronger upward movement backed by favourable economic developments would be necessary to improve the market outlook.
RBI actions and foreign investors selling remain concerns
Investors are also assessing the impact of the RBI’s measures aimed at managing volatility in the rupee. These include a dedicated dollar window for oil marketing companies and increased costs associated with certain foreign-exchange hedging transactions.
Changes in interest rates and banking liquidity requirements have added another layer of uncertainty, prompting investors to closely evaluate the broader financial environment.
Foreign institutional investors remained net sellers of Indian equities on October 9, offloading shares worth approximately Rs 3,568 crore. In contrast, domestic institutional investors purchased equities worth around Rs 4,743 crore, providing some support to the market.
Banking stocks weaken as volatility rises
Public-sector banking shares were among the major laggards, with State Bank of India, Punjab National Bank and Union Bank of India facing selling pressure. The Nifty PSU Bank index also underperformed other sectoral indices.
Meanwhile, the India VIX, which measures expected market volatility, moved higher, reflecting growing nervousness among market participants.
Shrikant Chouhan, Head of Equity Research at Kotak Neo, highlighted 22,300 as an important support level for the Nifty. He indicated that a sustained rise above 22,600 could strengthen recovery prospects, whereas a decisive fall below support might trigger further selling.
Going forward, investors will closely track inflation trends, RBI developments and corporate earnings to assess the market’s next move.
-ENDS–
Disclaimer: This article is for informational purposes only and is based on publicly available information. APAC Media is not responsible for investment decisions or losses. Please conduct your own research or consult a financial adviser before investing.
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