The Indian stock market started the week on a sour note this Monday as bears tightened their grip on Dalal Street. Benchmark indices surrendered to intense selling pressure driven by weak earnings from IT majors and persistent foreign fund outflows. Investors lost significant wealth as heavyweights like Reliance Industries and Wipro dragged the market lower amidst negative global cues.
Market sentiment took a major hit following disappointing quarterly numbers from the tech sector. The volatility index spiked as traders rushed to trim their positions in high-valuation stocks. All eyes are now focused on the upcoming corporate results and global economic data which could dictate the trend for the rest of the week.
Bears Tighten Grip on Dalal Street
The headline indices opened flat but quickly slipped into the red as the session progressed. Selling intensified in the final hour of trade which pulled the benchmarks to the day’s low. The 30-share BSE SENSEX fell by 324.17 points to close at 83,246.18. This marks a decline of 0.39 percent from its previous close.
Broader markets also felt the heat. The NIFTY50 index on the National Stock Exchange dipped 108.85 points to settle at 25,585.50. This represents a 0.42 percent drop for the broader gauge. The negative breadth indicates that more stocks declined than advanced during the trading session.
Sectoral indices painted a gloomy picture. Realty and Media stocks faced the brunt of the selling pressure. Banking stocks also witnessed profit booking after recent gains. However, the biggest drag came from the heavyweight counters which failed to hold key support levels.
Wipro Shares Crash After Weak Q3 Earnings
The biggest talking point of the day was the massive sell-off in Wipro shares. The IT major witnessed its stock price plummeting by 8.21 percent in a single session. This sharp decline came right after the company announced its third-quarter earnings which failed to impress the street.
Investors were particularly disappointed by the company’s forward guidance. The management commentary suggested a challenging environment for the IT services sector. This gloom spread rapidly across the trading floor.
Key Reasons for Wipro’s Fall:
- Weak Revenue Guidance: The company projected lower revenue growth for the upcoming quarter.
- Margin Pressure: Operating margins remained under stress due to rising wage costs.
- Peer Comparison: Wipro’s performance lagged significantly behind industry leaders like TCS and Infosys.
Market analysts believe that the stock might remain under pressure in the near term. The earnings miss has triggered a wave of downgrades from several brokerage firms. Traders are now wary of touching IT stocks until there is clarity on demand recovery from US and European markets.
Reliance Falls While IndiGo Flies High
Reliance Industries Limited also contributed heavily to the market fall. The oil-to-telecom conglomerate saw its shares drop by nearly 3 percent. Being an index heavyweight, any movement in Reliance has a magnified impact on the NIFTY and SENSEX.
Selling in Reliance was attributed to profit booking and concerns over refining margins. The stock had seen a good run recently, prompting traders to take some money off the table. A 3 percent cut in Reliance wipes out a massive chunk of the index’s market capitalization.
Top Gainers and Losers (NIFTY 50):
| Top Gainers | Change (%) | Top Losers | Change (%) |
|---|---|---|---|
| IndiGo | +4.00% | Wipro | -8.21% |
| Coal India | +1.50% | Reliance | -2.87% |
| Bharti Airtel | +1.20% | Tata Motors | -2.84% |
On the flip side, InterGlobe Aviation (IndiGo) emerged as a star performer. The stock surged 4 percent in a weak market. Falling crude oil prices and robust passenger traffic numbers boosted investor confidence in the airline stock. This contrarian move provided some relief to traders holding aviation portfolios.
FII Outflows Dampen Investor Sentiment
Foreign Institutional Investors (FIIs) continued their selling spree which kept the bulls in check. Recent data shows a consistent outflow of foreign funds from Indian equities. On Friday alone, FIIs offloaded shares worth ₹4,346.13 crore on a net basis.
Domestic Institutional Investors (DIIs) tried to absorb the supply by buying shares worth ₹3,935.31 crore. However, this support was not enough to counter the aggressive selling by foreign players. The relentless selling by FIIs is a worrying sign for market participants.
“The persistent selling by foreign investors is creating a cap on the market upside. Until we see a reversal in FII flows, volatility is likely to continue,” said a market strategist from a leading brokerage firm.
Global factors are also playing a role. Rising bond yields in the US and uncertainty over interest rate cuts are prompting foreign money to exit emerging markets like India. Investors are advised to remain cautious and avoid aggressive bets until the market stabilizes.
The market breadth remained negative throughout the day. Stocks like Tata Motors and Max Healthcare also found themselves on the losing list. Traders are now looking at the 25,500 level on Nifty as a crucial support zone for the coming days.
Monday’s trading session served as a harsh reminder of the market’s volatility. While Wipro’s crash grabbed headlines, the broader weakness across sectors is a cause for concern. Investors must tread carefully and focus on quality stocks with strong fundamentals. As the earnings season progresses, stock-specific action will likely drive the market more than general trends.
