Stock market today: Sensex, Nifty 50 back in the red; Reliance, Bajaj Finance top drags

Stock market today: Losses in shares of select heavyweights, including Reliance Industries, Bajaj Finance, and Bajaj Auto, dragged Indian stock market benchmarks—the Sensex and the Nifty 50—into negative territory on Tuesday, October 15, even as mid and small-cap segments of the market ended with gains.

Weak global cues, unimpressive Q2 earnings and concerns over sticky inflation also weighed on market sentiment. However, a sharp fall in crude oil prices offered some comfort and capped the losses for the market.

There were no clear cues from global peers. European markets and US futures traded mixed, while oil prices crashed after reports that Israel will not strike Iranian energy targets. Crude benchmark Brent Crude crashed over 5 per cent to the level near $73 per barrel.

The domestic market lacks new catalysts to sustain its gains, and the lacklustre September quarter earnings raise concerns that the Indian market's stretched valuations may be unsustainable.

The market needs good earnings to sustain its valuations. As earnings are a key driver of a company's intrinsic value, earnings growth justifies higher prices and keeps valuation metrics like the P/E (price-to-earnings) ratio in check, supporting investor confidence. Without solid earnings, valuations become difficult to justify, and stock prices are at risk of a downturn.

Meanwhile, the spectre of inflation has come back to haunt investors. India's retail inflation rose to a nine-month high in September due to higher food prices. Government data on Monday showed annual retail inflation, based on the all-India Consumer Price Index (CPI), rose to 5.49 per cent in September, higher than 3.65 per cent in August. This is the highest retail inflation rate since December 2023, when it was 5.69 per cent.

The Sensex slipped 153 points, or 0.19 per cent, to 81,820.12, while the Nifty 50 closed 71 points, or 0.28 per cent, lower at 25,057.35.

Shares of Reliance Industries ended as the top drag on the Sensex and the Nifty 50. The stock ended 2.06 per cent lower after it reported a fall in its net profit for Q2FY25.

Sectoral indices end up mixed

Among the sectoral indices on the NSE, Nifty Metal fell 1.44 per cent, followed by Nifty Auto which declined 0.83 per cent.

On the other hand, the realty index jumped 2.05 per cent.

The Nifty Bank index closed with a mild gain of 0.17 per cent, while the PSU Bank and Private Bank indices fell 0.21 per cent and 0.06 per cent, respectively.

Mid and smallcaps buck the trend

While the benchmark indices ended lower, the mid and smallcap segments bucked the trend. The BSE Midcap index rose 0.25 per cent, while the BSE Smallcap index witnessed a smart gain of 1.05 per cent.

BSE m-cap inches up

Thanks to gains in the mid and small-caps, the overall market capitalisation (m-cap) of BSE-listed firms inched up to nearly ₹463.9 lakh crore from about ₹463.6 lakh crore in the previous session.

Stocks at one-year highs

Meanwhile, as many as 258 stocks, including Infosys, HCL Tech, Tech Mahindra, Persistent Systems, Divi's Labs and HDFC Asset Management Company, hit their fresh 52-week highs in intraday trade on the BSE.

Experts' views on markets

According to Vinod Nair, the head of research at Geojit Financial Services, the domestic market fell due to a mixed global trend and partial profit booking. Nair underscored although declining crude prices are beneficial for the domestic economy, they signal weakening global demand.

Additionally, Nair said India’s CPI surged due to food prices, which will delay expected rate cuts. Furthermore, subdued corporate Q2 results are leading to a cautious stance.

On the technical front, Shrikant Chouhan, the head of equity research at Kotak Securities, underscored that on the daily charts, the Nifty 50 formed a bearish candle, which indicates temporary weakness.

"We are of the view that the short-term market texture is non-directional, and rangebound activity is likely to continue in the near future. For the day traders now, 25,000/81,500 would be the immediate support zone. Above this, we could see one quick pullback rally until 25,200-25,250/82,300-82,500. On the flip side, below 25,000/81,500, the market could retest the level of 24,920-24,900/81,000-80,700," said Chouhan.

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