Indian benchmark indices, the Nifty 50 and Sensex, failed to stage a recovery on November 14, continuing their downward trend for the sixth consecutive session. Despite a positive opening, both indices succumbed to selling pressure, resulting in a dip to near five-month lows.

The Nifty 50 touched an intraday low below the 23,500 mark before some buying momentum helped it recover above this critical level. However, it remains more than 10% lower than its September peak, as the index entered a technical correction in the previous session.

Key Drivers Behind Market Decline

The ongoing relentless selling by foreign institutional investors (FIIs) is one of the primary contributors to the market's struggles. FIIs have offloaded Indian equities worth Rs 27,683.30 crore this month, further intensifying the market's downward pressure. Additionally, the Q2 earnings season has not been as optimistic as expected, with corporate results pointing to a growth slowdown in India, exacerbating concerns.

Despite a subdued earnings season, global factors like US inflation data for October did offer some positivity. The inflation numbers came in in-line with expectations, offering some relief globally. However, the concerns within the domestic market, particularly the weak earnings and FII outflows, have outweighed any optimism from the global front.

Weak Trend in Benchmarks

At noon, the Sensex was down 72.70 points, or 0.09%, at 77,618.25, and the Nifty was down 3.70 points, or 0.02%, at 23,555.30. Both indices have been in a downward spiral, failing to regain momentum due to persistent selling pressure.

Despite the weakness in the benchmark indices, the broader market showed some resilience. The BSE Smallcap and BSE Midcap indices rebounded, rising by about 1%. This helped tilt the market breadth in favor of gainers, with 1,956 shares advancing, 1,328 shares declining, and 79 shares remaining unchanged.

Key Stock Performance

• Eicher Motors: Shares soared over 7%, marking its best performance in a year following an 8% YoY net profit increase. This stock is among those with high FII holdings and shows strong earnings-driven momentum.
• Kotak Bank, Power Grid, and Hindalco: Each posted gains around 1.2%, contributing to Nifty 50's rise to near 23,600 points.

Corporate Earnings Insights

• Apollo Tyres: Shares climbed as Q2FY25 revenue rose 2.5% YoY to ₹6,437 crore, propelled by growth in APMEA and Europe. However, higher raw materials and employee expenses caused a 37.3% decline in net profit to ₹297.5 crore.
• Niva Bupa Health Insurance: Made its debut on the bourses, opening at a 5.6% premium above its ₹74 issue price. The ₹2,200 crore IPO attracted a healthy 1.8x subscription, underscoring investor confidence.
• Dilip Buildcon: Despite a 12.9% YoY revenue dip to ₹2,520 crore, net profit surged 242.8% to ₹235.2 crore, helped by reduced raw materials and employee benefits expenses. The stock has significant promoter pledging, which may influence investor sentiment.

Stock Movers and Sector Analysis

• Godrej Industries: Surged as Q2FY25 net profit grew 229.5% YoY to ₹287.6 crore, supported by a 20.3% revenue increase across chemicals, real estate, finance, and dairy segments. The stock consistently provides returns, making it attractive for long-term investors.
• Torrent Power: Declined due to an 8.5% YoY drop in net profit to ₹481 crore, missing expectations by 16.9%, impacted by decreased merchant power sales. However, revenue grew by 3.1% to ₹7,175.8 crore.
• Garden Reach Shipbuilders & Engineers: Rose as Q2FY25 net profit exceeded forecasts with a 21.1% YoY increase to ₹97.8 crore. Revenue surged by 28.4% to ₹1,152.9 crore, benefiting from lower resale costs.

Global Market Outlook

European and major Asian markets showed mixed performances, while US indices closed with modest gains on Wednesday. In the US, Spirit Airlines’ stock plunged about 60% after reports surfaced about a potential bankruptcy filing, adding to market volatility.

Market Outlook

As the Nifty 50 continues to struggle below the 23,500 mark, investors will closely monitor FII trends and Q2 earnings moving forward. The relentless selling by FIIs and the growth slowdown in corporate results are likely to keep the market in correction mode, at least in the short term.

On the other hand, the BSE Smallcap and Midcap indices could continue to provide pockets of opportunity, especially in sectors or stocks that remain resilient despite broader market challenges.

Technical correction in the market remains a critical factor to watch, and investors may look for signs of stability in global economic data or domestic policy changes that could help reverse the current negative sentiment.

In summary, the Nifty 50 and Sensex are facing significant challenges due to FII outflows and a subdued earnings season. While the broader market is showing some signs of recovery, the overall sentiment remains cautious, and it could take time for the benchmarks to stabilize and resume an upward trend.

The Upcoming IPOs in this week and coming weeks are Rosmerta Digital, NTPC Green, Avanse Financial and Nisus Finance.

The Current active IPO are  Mangal Compusolution, Black Buck, and Onyx Biotec.

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