Indian Stock Market Recovers After Early Losses; Asian Paints Faces Setback
After a rocky start to the trading session on Monday, the Indian stock market showed signs of recovery, despite early losses driven by selling pressures across key sectors. The decline was notably concentrated in PSU banks, financial services, pharma, and FMCG stocks.
Asian Paints Disappoints with Q2 Results
A major disappointment came from Asian Paints, whose shares plummeted by around 9% following a significant miss in its Q2 FY25 earnings. The paint giant reported a 42.4% year-on-year decline in its net profit for the July-September quarter, which fell to Rs 694.6 crore from Rs 1,205.4 crore in the same period last year. This sharp drop in profitability led several brokerages to downgrade their outlook on the stock, dampening investor sentiment.
Market Snapshot: Early Trends
As of early trade, the benchmark Sensex was hovering around 79,388.77, while the Nifty stood at 24,140.15. The broader market showed mixed trends with 563 stocks advancing and 1,439 stocks declining on the National Stock Exchange (NSE).
The banking sector saw a slight pullback with the Nifty Bank index dropping by 0.17% to 51,472.15, while the Nifty Midcap 100 and Nifty Smallcap 100 indices also experienced losses, down 0.64% and 0.96%, respectively.
Among the biggest losers in the Sensex pack were financial heavyweights like Axis Bank, IndusInd Bank, Bajaj Finance, ICICI Bank, and Bajaj Finserv. On the other hand, stocks such as Tata Motors, Power Grid, Maruti Suzuki, Mahindra & Mahindra, and HCL Technologies led the gainers.
Global Market Sentiment and the US Impact
Globally, Asian markets were under pressure with major indices in Shanghai, Hong Kong, Jakarta, Tokyo, Seoul, and Bangkok all trading in the red. However, the US stock market closed higher on the previous trading day, continuing its upward momentum driven by optimistic earnings forecasts.
Market analysts believe that the rally in US equities, particularly the gains in the Dow Jones and S&P 500 indexes, which have breached new highs, is no longer providing a strong tailwind for Indian markets. A significant driver of this rally has been the promise of tax cuts and pro-business policies under former President Donald Trump, which investors expect will boost corporate earnings in the US.
Indian Market Outlook: Bearish Sentiment Prevails
In contrast, Indian markets face growing headwinds. Analysts suggest that deteriorating earnings expectations for FY25, coupled with a series of downgrades, are weighing heavily on stock prices, favoring bearish sentiment in the near term. Foreign institutional investors (FIIs), who have been net sellers for several sessions, may continue to reduce their exposure to Indian equities in favor of the US markets, which have outperformed India this year.
FIIs sold equities worth Rs 3,404 crore on November 8, while domestic institutional investors (DIIs) picked up equities worth Rs 1,748 crore during the same period, highlighting the ongoing divergence in market flows.
