Sensex and Nifty steady as financials support midday recovery; FIIs continue to sell

Sensex and Nifty hover near flatline as financials support recovery

Indian benchmark indices, Sensex and Nifty, recovered from their lows by midday on October 29, supported by gains in the financial sector despite continued pressure in the auto and IT segments. While a temporary easing of Middle East tensions and lower crude prices offered brief relief, ongoing concerns around corporate earnings and sustained foreign institutional investor (FII) selling weighed on market sentiment.

At 1:10 PM, the Sensex was down 25 points, or 0.03 percent, at 79,979, while the Nifty dipped by 22 points, or 0.1 percent, to 24,316. In the broader market, both BSE Midcap and BSE Smallcap indices traded flat as well, with 1,688 shares advancing, 1,635 declining, and 95 remaining unchanged.

Sector performance and major movers

The Nifty Auto index faced the sharpest decline, dropping nearly 2 percent as Tata Motors led the fall with a more than 4 percent dip. Pharma and IT sectors also remained weak, with Infosys and Tech Mahindra pulling down the IT index by almost 1 percent. In contrast, the Nifty Bank index climbed over 1 percent, driven by ICICI Bank and SBI.

Meanwhile, select stocks saw significant moves. Spandana Sphoorty declined 17 percent after posting a net loss for Q2FY25, while Gillette India surged up to 7 percent on a robust profit increase of 43.5 percent.

FII and DII activity

FIIs maintained their selling streak, offloading Rs 1,03,470 crore worth of Indian equities throughout October, while domestic institutional investors (DIIs) countered by purchasing shares worth Rs 98,492 crore. Experts anticipate market volatility to persist amid uncertainties like the upcoming U.S. presidential elections.

Expert view

Geojit Financial Services’ Chief Investment Strategist, V.K. Vijayakumar, noted a “decline in the intensity of FII selling,” which he sees as positive for the market. However, Vijayakumar suggested that FIIs could continue to sell given concerns around India's premium valuations and challenges in urban consumption.

“Some froth in valuations has been removed,” he added, particularly in sectors like defense and railways. Vijayakumar highlighted the trend towards “quality accumulation” in private financials, suggesting this focus could foster stability in the market.