Market Update: Unabated Foreign Fund Outflows and Middle East Conflict Weigh on Indian Indices
Market Update: Unabated Foreign Fund Outflows and Middle East Conflict Weigh on Indian Indices
As of October 4, 2024, the Indian equity markets are feeling the heat, continuing their downward trend from the previous day. This morning, the Bombay Stock Exchange (BSE) Sensex saw a decline of 354.67 points, settling at 82,142.43, while the National Stock Exchange (NSE) Nifty fell by 114.1 points to reach 25,136. This marks the fifth consecutive day of losses for the benchmark indices, driven by a combination of foreign fund outflows and escalating tensions in the Middle East.
Key Contributors to the Decline
The ongoing conflict in the Middle East has amplified market volatility, contributing to a fragile trading environment. Foreign Institutional Investors (FIIs) have also been pulling money out of Indian equities. On October 3, 2024, FIIs offloaded equities worth a staggering ₹15,243.27 crore, adding to a total of ₹30,614 crore in the cash market over just three days.
V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that investors are increasingly shifting their focus from India's relatively high market valuations to what they perceive as cheaper opportunities in Hong Kong. The anticipation of monetary and fiscal stimulus from Chinese authorities aimed at boosting their economy has further influenced this trend.
Major Laggers and Gainers
From the 30 companies listed on the Sensex, several key players recorded significant declines. Bajaj Finance, Asian Paints, NTPC, UltraTech Cement, State Bank of India, and Bajaj Finserv were among the biggest laggards. Conversely, some stocks managed to buck the trend, with HCL Technologies, IndusInd Bank, and Tata Consultancy Services showing gains, albeit modest in the overall context.
Global Market Context
In the broader Asian markets, we observed a mixed bag, with Seoul, Tokyo, and Hong Kong trading positively, while mainland China remained closed for a holiday. However, U.S. markets ended lower on Thursday, reflecting concerns that resonate globally.
Oil Prices and Economic Outlook
On the commodities front, the global oil benchmark, Brent crude, saw a slight dip of 0.06%, trading at $77.57 per barrel. This decline comes amid fears of reduced demand due to geopolitical tensions, which could affect economic recovery.