Earnings misses from marquee stocks such as Reliance Industries, ICICI Bank and Wipro, coupled with renewed geopolitical concerns and weak global cues, prompted a cautious approach among investors who had been hoping for a revival in corporate earnings during the third quarter.
Subdued quarterly results, persistent weakness in the rupee and an unabated outflow of foreign capital from Indian equities further unnerved market participants, traders said. A deterioration in global risk appetite triggered a broad risk-off mood across equity markets worldwide, leading investors to rotate into safe-haven assets such as gold and silver.
Reflecting the cautious sentiment, the 30-share BSE Sensex declined 324.17 points, or 0.39 per cent, to close at 83246.18. On the BSE, 3,074 stocks declined, while 1,227 advanced and 182 remained unchanged. The 50-share NSE Nifty fell 108.85 points, or 0.42 per cent, to 25,585.50.
“Global cues remained weak as Japanese government bond yields surged, with the benchmark 10-year yield climbing to around 2.3 per cent — the highest level since February 1999 — amid fiscal jitters and concerns that election-related tax cuts could further strain Japan’s finances,” said Siddhartha Khemka, head of research, wealth management, Motilal Oswal Financial Services. “Risk appetite was further dampened after renewed trade-related rhetoric from the US, with Trump reiterating plans to levy taxes on European countries opposing his stance on Greenland.”
“On the stock-specific front, post-earnings reactions remained sharp, with Wipro, Reliance and ICICI Bank shares falling during the session. Going ahead, markets are expected to trade sideways, tracking global cues and ongoing earnings, while any escalation on the geopolitical front would remain a key overhang,” he added.
“Persistent selling by foreign investors, along with continued weakness in the rupee against the dollar, added to the pressure on Indian equities, keeping participants defensive through the session,” said Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm.
InterGlobe Aviation, Tech Mahindra, Hindustan Unilever and Bajaj Finance were among the gainers.
With the Q3 earnings season progressing, stock-specific volatility is likely, particularly where performance has been mixed, said Vinod Nair, head of research, Geojit Investments.
Meanwhile, the rupee breached the 91-a-dollar mark for the second time in a month before ending 14 paise lower at 90.92 (provisional) against the greenback on Monday.