Domestic markets are facing pressure as foreign investors continue to sell their holdings.

Sensex, Nifty trade flat as FII selling pressure hurts investor sentiments

The S&P BSE Sensex was up just 9.75 points at 90,091.73 at 10:20 am, while the NSE Nifty50 fell 7.25 points to trade at 24,428.25.

by · India Today

In Short

  • FIIs continue unprecedented selling, affecting Indian market sentiment
  • FMCG stocks decline amid sluggish festive demand concerns
  • Smallcap and midcap stocks struggle with sustained market volatility

Benchmark stock market indices gained marginally in early trade on Thursday as persistent selling by foreign institutional investors (FIIs) and dull Q2 earnings dampened the sentiment on Dalal Street.

The S&P BSE Sensex was up just 9.75 points at 90,091.73 at 10:20 am, while the NSE Nifty50 fell 7.25 points to trade at 24,428.25.

Sustained volatility has also taken a toll on smallcap and midcap stocks as most other broader market indices also traded flat in early trade.

FMCG stocks declined sharply after some major firms expressed concerns about sluggish demand during the festive season.

The top five gainers on the Nifty50 were Grasim, Coal India, Ultratech Cement, HDFC Bank and NTPC. On the other hand, the top losers were HUL, Hindalco, SBI Life, Nestle India and Bajaj Auto.

UNPRECEDENTED FII SELLING

Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said, “The major headwind that the market is facing now is the massive, unprecedented and sustained FII selling which has touched Rs 93,088 crore through 23rd October, as per NSDL data.”

“The fundamental trigger for the FII outflows is the elevated valuations in India and the relatively cheap and attractive valuations in markets like China and Hong Kong,” he added.

He explained that the FII selling “is getting aggravated by news of slowdown in corporate earnings”.

“Investors should be cautious at this juncture and refrain from chasing temporary rallies. High quality financials and IT stocks can be bought on dips. Digital stocks which continue to show acceleration in growth can be gradually accumulated on declines,” Vijayakumar noted.