Indian stock market benchmarks, the Sensex and Nifty 50, closed in the red for the third consecutive session on Thursday, October 17. The Sensex dropped 495 points, or 0.61%, to settle at 81,007, while the Nifty 50 declined by 221 points, or 0.89%, to end at 24,749.85.
Among the top losers on the Sensex were shares of Nestle, Mahindra & Mahindra, and UltraTech Cement. In contrast, Infosys, Tech Mahindra, and Power Grid were the top gainers. Mid and small-cap segments saw sharper declines, with the BSE Midcap index plummeting 1.65% and the BSE Smallcap index falling 1.42%.
The overall market capitalization of BSE-listed companies fell from ₹463.3 lakh crore to ₹457.3 lakh crore, wiping out ₹6 lakh crore in investor wealth in just one day.
“Despite positive cues from the US and Europe, markets continued their downward trajectory due to foreign fund selling and a sharp fall in automobile stocks, especially ahead of Hyundai’s IPO closing. Expensive valuations in banking, realty, metals, and telecom also led to significant profit booking,” said Prashanth Tapse, Senior VP (Research) at Mehta Equities.
Sectoral Performance
Except for Nifty IT, which rose by 1.19%, all sectoral indices closed with losses. Nifty Realty dropped 3.76%, Auto fell 3.54%, and Consumer Durables and Media ended with losses of 2.20% and 2.18%, respectively.
Factors Driving the Market Decline
Nifty 50 has slipped 1.5% over the last three sessions and is now down 6% from its all-time high of 26,277.35 reached on September 27. Key factors behind the recent downturn include escalating tensions in West Asia, volatile crude oil prices, foreign capital outflows, and lackluster Q2 earnings.
Foreign portfolio investors have pulled out ₹67,311 crore from Indian equities as of October 16. Additionally, disappointing earnings in the September quarter have raised concerns about the sustainability of high market valuations.
“The domestic market is witnessing widespread selloffs driven by weak Q2 results, high NPAs, and slow credit growth. Poor festive season sales forecasts have also dampened investor sentiment,” noted Vinod Nair, Head of Research at Geojit Financial Services.