Indian Equities Decline on Weekly Expiry, Nifty Drops 221 Points

Indian equities experienced a turbulent trading session on Thursday, following a slightly higher opening that quickly faded. The market concluded sharply lower, driven by a widespread sell-off, particularly in the auto and real estate sectors, which saw declines of up to 3.5 percent.

By the end of the trading day, the Nifty index closed down by 0.89 percent or 221.45 points at 24,749.85. Similarly, the Sensex finished 495 points lower, marking a 0.61 percent decrease to settle at 81,006.61.

The broader markets fared even worse, with the Nifty Midcap 100 index experiencing a drop of more than 1.5 percent, equivalent to around 900 points. The Nifty Smallcap 100 index also fell by over 1 percent.

Among the Nifty constituents, notable gainers included stocks like Infosys, Tech Mahindra, Power Grid Corporation, L&T, and SBI. In contrast, the laggards comprised companies such as Bajaj Auto, Shriram Finance, Nestle, Mahindra & Mahindra (M&M), and Hero MotoCorp.

The auto sector was particularly hard-hit, likely due to Bajaj Auto reporting lower sales during the festive season compared to previous years. The sector's performance was notably impacted by concerns surrounding Tata Motors, whose luxury division, Jaguar Land Rover (JLR), has been facing declining demand. Reports indicate that Tata Motors is offering discounts of up to ₹2.05 lakh to boost sales, raising further worries about JLR's order backlog, which has dropped below pre-pandemic levels.

Regarding the market outlook, Mr. Atul Parakh, CEO of Bigul, commented on the auto index's sharp decline, attributing part of the fallout to Tata Motors' challenges. Furthermore, Dr. Vijaykumar from Geojit Financial Services highlighted that the Nifty's consolidation around the 25,000 level may continue, amid foreign institutional investor (FII) selling and domestic institutional investor (DII) buying. The reemergence of small-cap stocks outperforming could also become a point of concern due to ongoing liquidity issues.

On the international front, European markets recorded gains while investors awaited the European Central Bank's interest rate decision, with the French CAC index showing an increase of over 1 percent at last check.

Equities, Market, Decline