Sensex and Nifty extended their losses by 0.3 percent each by noon on October 11, pulled down by banking and auto stocks. Foreign Institutional Investor (FII) sell-offs, weak Q2 FY25 earnings projections, and rising geopolitical tensions are dampening market sentiment.

By 11:45 AM, the Sensex had dropped 250 points to 81,365, while the Nifty fell 65 points, sitting at 24,932.

In contrast, the broader market offered some respite, with the BSE Midcap rising 0.1 percent and the BSE Smallcap up 0.3 percent.

As the focus shifts to earnings season, analysts anticipate volatility to rise, with more opportunities emerging in the broader market.

Sectoral Trend

Banking and auto stocks led the market's decline. Nifty Bank fell nearly 1 percent, dragged down by heavyweights ICICI Bank and HDFC Bank. Meanwhile, Nifty Auto declined 0.4 percent, with M&M, Maruti Suzuki, and Bajaj Auto among the top losers.

On the other hand, oil & gas and metal stocks rallied. Reliance Industries, ONGC, and Oil India boosted the oil & gas sector. Metal stocks also surged ahead of China's stimulus announcement. The Nifty Metal index gained over 1 percent with Tata Steel, Hindalco, and Vedanta leading the charge.

Fundamental View

"Market is likely to remain volatile in the near-term alternating between FII selling and DII buying," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. "Attractive valuations in other markets, particularly in Chinese stocks, will facilitate further selling by FIIs in India since Indian valuations are elevated. Concerns of earnings downgrade in H2FY25 render Indian valuations difficult to sustain."

"However, the sustained flows into the domestic mutual funds, where monthly SIPs have set a new record of Rs 24,500 in September, will ensure that all FII selling will be easily absorbed by DII buying," Vijayakumar added.

Technical View

"Technically, there have been insignificant changes in the market outlook, construing a challenging market environment with no clarity on the trend," said Sameet Chavan, Head of Technical and Derivative Research at Angel One.

He identifies 24,800 as a crucial support level for the Nifty 50, warning that a break below this point could trigger further corrections. On the upside, resistance looms at 25,250-25,300.

Key Nifty gainers

Tata Steel, Tech Mahindra, HCLTech, Trent, Hindalco

Key Nifty losers

Adani Enterprises, ICICI Bank, Cipla, M&M, TCS

Key Sensex gainers

JSW Steel, Tata Steel, Tech Mahindra, HCLTech

Key Sensex losers

Power Grid, Axis Bank, ICICI Bank, M&M, TCS

Stock moves

Tata Consultancy Services: Shares slid 2.5 percent following lackluster September-quarter earnings that revealed a weak operational performance, declining margins, and limited sign of recovery.

Arkade Developers: Share price skyrocketed over 8 percent after the recently listed company reported a rise of nearly 360 percent in its net profit.