Sensex, Nifty snap 2-day rally as dull Q2 earnings disrupt momentum

The BSE Sensex fell 0.5% to close at 79,966, while the NSE Nifty 50 index declined by the same margin to 24,350, as market sentiment weakened due to ongoing foreign selling and lacklustre corporate earnings.

In Short

• Sensex and Nifty decline as weak Q2 earnings weigh heavily
• Banking and IT stocks experience sharp declines during trading
• Foreign selling and volatility contribute to market caution today

Benchmark stock market indices fell after a two-day rally as weak Q2FY25 earnings continued to disrupt momentum on Dalal Street.

The BSE Sensex fell 0.5% to close at 79,966, while the NSE Nifty 50 index declined by the same margin to 24,350, as market sentiment weakened due to ongoing foreign selling and lacklustre corporate earnings. Most of the broader market indices also fell during the session as volatility rose during the session.

Banking, information technology (IT) and financial services stocks fell sharply during the session, contributing significantly to the downturn.

Rupak De, Senior Technical Analyst at LKP Securities, noted that the Nifty experienced volatility throughout the day, trading within a narrow range of 24,300 to 24,500. He observed that the index faced resistance near the 50 EMA on the hourly chart, prompting a correction towards the lower end of the range.

De stated, “Sentiment is likely to remain sideways as long as the Nifty stays within the 24,250 to 24,500 range. A decisive breakout from this level will provide direction for future movements. Support levels are identified at 24,250 and 24,000, with resistances at 24,500 and 24,750.”

Vinod Nair, Head of Research at Geojit Financial Services, added that the domestic market is exhibiting caution due to aggressive selling by foreign institutional investors (FIIs).

"The domestic market remains cautious due to aggressive selling by FIIs. Positively, strong domestic inflows are supporting market resilience though volatility has markedly increased," Nair said.

"Other EMs are also consolidating in anticipation of upcoming US economic data releases, elections, and the FOMC interest rate decision. Considering the weak Q2 domestic earnings and muted commentary, India's premium valuations are moderating."