Sensex slips 1,058 pts in 2 days, Nifty below 25,750; what’s next for stock market?

Domestic equity benchmarks Sensex and Nifty extended their losing streak for the second consecutive session on Friday, closing lower as selling pressure in heavyweight stocks such as Eternal, NTPC and Kotak Mahindra Bank outweighed gains in Bharat Electronics and L&T.

At the closing bell, the Sensex slipped 465.75 points, or 0.55 per cent, to end at 83,938.71, extending its two-day losing streak to 1,058 points. The Nifty50 also declined 155.75 points, or 0.60 per cent, to settle at 25,722.10.

Eternal emerged as the top loser on Sensex, falling 3.52 per cent to Rs 317.75. NTPC followed with a 2.39 per cent decline, while Kotak Mahindra Bank, ICICI Bank, Bajaj Finserv and Power Grid fell 1.57 per cent, 1.28 per cent, 1.26 per cent, and 1.17 per cent, respectively.

Five stocks, namely, HDFC Bank, ICICI Bank, Eternal, Kotak Mahindra Bank and Infosys, contributed heavily to the Sensex’s decline.

Among sectoral indices, the BSE Metal index slipped 1.15 per cent to end at 35,128.74, while the BSE Bankex declined 0.55 per cent to close at 64,936.05.

Overall, out of 4,309 actively traded stocks on the BSE, 1,799 ended higher, while 2,360 declined, and 150 closed unchanged. During the session, 136 stocks scaled their 52-week highs, whereas 66 slipped to 52-week lows. Meanwhile, 208 scrips were locked in their upper circuits and 165 in lower circuits. 

Vinod Nair, Head of Research at Geojit Financial Services, said Indian equities ended decisively lower after a volatile session, as investors booked profits amid mixed corporate earnings and a cautious global mood, weighed down by a stronger US dollar.

“Most sectors closed in the red, pressured by renewed FII selling which have turned cautious after Powell’s hawkish statement and  US-China trade development did not meet expectations. However, PSU banks outperformed on expectations of increased FDI limits and better Q2 results. After a strong rally, the markets are on a profit booking mode as a large part of the economic developments are factored in. Buy on dips is expected to stay as a trading strategy as optimism remain solid on a QoQ basis," Nair said.

Ajit Mishra, SVP – Research, Religare Broking Ltd, said markets edged lower on Friday, extending their ongoing consolidation phase, as the Nifty slipped over half a percent. “After a flat start, the index attempted to move higher but faced consistent profit booking in heavyweight counters across sectors, dragging it lower as the session progressed. Eventually, it settled near the day’s low at 25,722.10,” he said.

“Sector-wise, all key indices ended in the red, with metals, financials, and pharma among the top laggards. The broader markets also traded in line with the benchmark, slipping nearly half a percent each,” Mishra said.

“Technically, the Nifty is approaching a crucial support zone around 25,600, which aligns with its 20-day exponential moving average (DEMA). Sustaining above this level will be essential to preserve the prevailing positive bias; otherwise, a deeper correction cannot be ruled out. We continue to advise investors to use this consolidation phase to accumulate fundamentally strong names on declines, with a focus on sectors such as metals, autos, banking, and energy,” Mishra added.