Foreign outflows, earnings anxieties topple Indian shares for second week

BENGALURU: Indian benchmarks logged daily and weekly losses on Friday, weighed down by foreign outflows, slowing corporate earnings and escalating tensions in the Middle East.

The NSE Nifty 50 lost about 0.2%, while S&P BSE Sensex shed 0.4% this week. They lost about 4.5% each last week as well, the worst decline since June 2022.

Both indexes are down 5% from record-highs hit on Sept. 27 and have posted losses in eight of the last 10 sessions.

Foreign institutional investors sold Indian shares for the last nine sessions, offloading $7.8 billion worth of stocks, as they directed flows to China after it announced bumper stimulus measures.

The Indian rupee fell below 84 per dollar for the first time on Friday, pressured by a spike in oil prices and exodus of foreign money from the equity market.

Investors have booked profits in the last two weeks due to foreign outflows, worries over moderation in earnings, growing Middle East unrest and elevated corporate valuations, said Divam Sharma, founder and fund manager at Green Portfolio.

The consumer index lost 2% this week and was the top sectoral loser by percentage, after the central bank flagged inflation concerns at its policy meeting on Wednesday.

Automakers gained 2%, led by 3.9% rise in Mahindra & Mahindra this week, after CLSA upgraded the stock to “buy”, citing positive volume growth outlook.

Among stocks, retailer Trent rose 12% and was the top weekly gainer on the Nifty 50 after it said it would extend its portfolio in the mass-priced beauty segment.

The broader, more domestically-focussed small- and mid-caps jumped about 1.3% each for the week.

On the day, the Nifty 50 shed 0.14% to 24,964.25, while the Sensex lost 0.28% to 81,381.36, dragged down by financials and Tata Consultancy Services, India’s top software company.

TCS fell about 2% after it missing quarterly profit estimates.

The market remains watchful as Nifty valuations appear stretched, and more soft earnings from large-cap stocks could trigger further consolidation, said Krishna Appala, senior research analyst at Capitalmind Research.

Metals, however, rose 1% on expectations of more stimulus from top consumer China.