Indian stock markets decline on earnings downgrades and foreign outflows
Indian stock markets continued their downward momentum on Monday as earnings downgrades and foreign fund outflows weighed on investor sentiment. The Nifty 50 index opened down by 60 points (0.25%) at 24,087.25, while the Sensex started the day with a decline of 174 points (0.22%) at 79,312.13.
Experts said that Indian markets may continue to see outflows as the U.S. markets have become an attractive destination for investment following Trump’s return. Trump’s pro-business policies are driving the U.S. markets. The earning downgrades are also affecting the markets.
“The sustained rally in the U.S. markets, which have taken the Dow and S&P 500 above 40,000 and 6,000 respectively, no longer supports Indian markets,” said V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services. “With FY25 earnings falling short of expectations in India, and Trump’s policies expected to lift U.S. corporate earnings, foreign investors may continue reallocating capital to the U.S.”
In early trading, most sectoral indices traded in the red, with only Nifty Pharma, Nifty Consumer Durables, and Nifty Healthcare seeing marginal gains. In the Nifty 50 list, 14 stocks opened with advances, while 33 declined during the early trading session.
Several major companies, including ONGC, Hindalco Industries, Britannia Industries, NMDC, UPL, Jubilant Foodworks, and Hindustan Copper, are set to release their Q2 earnings today. These announcements may bring additional volatility to the market.
The trend of foreign portfolio investors (FPIs) selling off Indian stocks has accelerated in recent weeks. Since October, the Nifty 50 and Sensex have each lost around 8% as FPIs offloaded equities worth a reported ₹19,994 crore in just the first week of November, according to National Securities Depository Ltd (NSDL).
“The Nifty formed a small negative candle on the daily chart, indicating consolidation,” said Varun Aggarwal, MD of Profit Idea. “Technical analysis suggests a weak bias in the short term, with support around the 24,000 level. If selling continues, a retest of 23,800 is likely.”
Indian stocks weren’t the only ones under pressure; several other Asian markets also opened lower. Hong Kong’s Hang Seng dropped by more than 2.6%, South Korea’s KOSPI index fell by over 1%, while Japan’s Nikkei 225 and Taiwan’s weighted index slipped by 0.39% and 0.68% respectively.
