October 26, 2023
New Delhi, India
Indian Stock Market Slumps as Tech Earnings Disappoint and Global Factors Weigh
Indian equity indices faced a significant downturn on October 26, 2023, as a combination of factors sent shockwaves through the stock market.
Tech Earnings Disappointment
The sixth consecutive session of losses for the Indian stock market was marked by a substantial decline. The Sensex fell by 900.91 points (1.41%), closing at 63,148.15, and the Nifty dropped 264.90 points (1.39%) to close at 18,857.30. The performance of these key indices highlights a broad-based decline in the market.
Winners and Losers
Among the notable losers on the Nifty were companies like M&M, Bajaj Finance, Asian Paints, UPL, and Bajaj Finserv. On the other hand, gainers included Axis Bank, HCL Technologies, Adani Ports, IndusInd Bank, and ITC. This variance suggests that individual stocks and sectors had mixed performances.
Sectoral Performance
The BSE Midcap index recorded a 1% decrease, while the Smallcap index fell by 0.3%. Besides the power sector, all other sectoral indices were in the red, indicating that multiple sectors were negatively affected by the market’s performance.
Factors Influencing the Market
The market’s downturn was attributed to various factors. Disappointing earnings from information technology (IT) stocks, particularly Tech Mahindra, played a pivotal role. Additionally, rising U.S. Treasury yields sparked concerns of higher interest rates, impacting overall market sentiment.
Adani Group Under Scrutiny
Adani group stocks faced losses of 2% to 6% as reports emerged of a probe by India’s accounting regulator related to an EY member firm that audits five group companies. Notably, Adani Enterprises was the top Nifty 50 loser on this day.
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Global Factors at Play
The report also indicated that Asian markets experienced a decline, with the MSCI Asia ex-Japan index losing 1.4%. U.S. stock markets saw a downturn due to disappointing earnings by Alphabet and rising U.S. Treasury yields. The 10-year bond yield near 5% in the U.S. prompted foreign investors to sell, raising concerns about potential global growth implications.
Oil Prices Surge
Brent oil prices rose above $90 per barrel, potentially driven by geopolitical tensions. Israel’s Prime Minister mentioned preparations for a ground invasion of Gaza, contributing to concerns about global oil prices and their impact on various sectors and market sentiment.
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Axis Bank Stands Strong
In contrast to the overall market trend, Axis Bank emerged as the only gainer in the Nifty 50 index, showing a 0.75% increase. This was attributed to the bank surpassing profit estimates for the September quarter, demonstrating resilience in a challenging market environment.
In summary, the Indian stock market faced a bearish day, influenced by a combination of factors, including disappointing corporate earnings, rising U.S. Treasury yields, global market trends, and specific issues affecting certain companies, such as the Adani Group. While losses affected multiple sectors, Axis Bank remained a bright spot in an otherwise challenging market landscape.
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