Sensex, Nifty decline amid heavy FPI selling and Q3 earnings concerns

Indian equity benchmarks declined on Thursday as heavy foreign portfolio investor (FPI) selling and concerns over the December quarter earnings continued to dent sentiments. The Fed minutes, which showed that the US central bankers have decided to move slowly on interest rate changes in the coming months, added to investor woes.

 

The Sensex ended the session at 77,620, a decline of 528 points, or 0.7 per cent. The Nifty ended the session at 23,539, a decline of 150 points, or 0.6 per cent. For the week, the Sensex declined 2 per cent and the Nifty 1.9 per cent. The combined market capitalisation of BSE-listed firms declined by Rs 4 trillion on Thursday  and was at Rs 435 trillion.

 

 

FPIs on Thursday were net sellers to the tune of Rs 7,171 crore, the highest single-day selling since November 28, 2024, while domestic institutions were buyers worth Rs 7,640 crore. More than a third of Sensex losses was contributed by HDFC Bank, where FPIs hold a significant stake. The rupee hit a new low against the dollar at 85.86 amid robust demand for dollars.

 

"Weakening of the rupee is adding to the pressure of FPIs, who are now inclined to take some risk off the table due to uncertainties in earnings and policy shifts in the US after Trump assumes charge," said Andrew Holland, chief executive officer (CEO) of Avendus Capital Public Markets Alternate Strategies.

 

The recent business updates from some top Indian firms have raised concerns about whether earnings for the December quarter (Q3FY25) will differ from the quarter ending in September (Q2FY25). The December quarter earnings started coming in on Thursday with results of TCS post-market hours. TCS's December numbers fell short of Bloomberg estimates. According to these estimates, revenue was expected to be Rs 64,748 crore and net profit Rs 12,534 crore, but TCS posted a revenue of Rs 63,973 crore and a net profit of Rs 12,380 crore.

 

"The selloff was primarily due to cautiousness ahead of Q3 earnings announcements and mixed signals from global markets. Continuous selling by foreign institutional investors (FIIs) is adding to the negative sentiment. We expect markets to consolidate in a range with stock-specific action on the back of Q3 result announcements,” said Siddhartha Khemka, head of research, Wealth Management, Motilal Oswal Financial Services.

 

Going forward, the earnings season and the US employment report, which will offer traders fresh cues about the Federal Reserve's rate cut path, will determine the market trajectory.

 

The market breadth was weak, with 2,826 stocks declining and 1,144 advancing. Two-thirds of Sensex stocks declined. Larsen and Toubro, which fell 1.8 per cent, and TCS, which declined 1.7 per cent, were the other big contributors to Sensex declines.