Following a decent start to trade where market markets snapped a 5-day losing streak, the Nifty and Sensex again slipped into the red after a sharp downturn in energy and public sector banks, among others turned investors bearish. Remember, both benchmarks scaled fresh peaks in late September.

At noon, the Sensex was down 90.50 points or 0.11 percent at 81,597.95, and the Nifty was down 76.90 points or 0.31 percent at 24,937.70. About 492 shares advanced, 2998 shares declined, and 97 shares unchanged.

The broader market comprising of mid and small-cap indices also mirrored weak trends after the two were trading 1.5 and 2.5 percent lower. Ruchit Jain, Research Analyst at 5Paisa, attributes the recent market correction to the continuation of losses from the past week. Foreign institutional investors (FIIs) have been selling heavily, drawn by the more attractive valuations in Chinese markets following China's stimulus measures. This significant outflow, coupled with escalating geopolitical tensions and rising oil prices, has led to corrections in major indices.

India VIX, an index to assess market anxiety, also flared up by nearly 4 percent to be hovering close to the 15 level.

Sectoral Trend

All sectors swam in the sea of red barring IT after gains in heavyweights such as Infosys, LTIMindtree, Mphasis, and TCS helped sustain momentum in a weak market.

The Nifty PSU Bank index was the worst hit, tanking over 2 percent. A sharp plunge in counters such as SBI, Bank of Baroda, Punjab National Bank, and Union Bank impacted the overall mood. The Nifty Energy index also fell by a massive 2 percent. NTPC, Coal India, and ONGC fell the most, dragging the index lower. Nifty Metal and Infra also fell over a percent each.

Fundamental View

"The Indian market has been following a different path with the Nifty declining 4.5 percent in a week. This sharp correction has been mainly triggered by the massive FII selling in the cash market which reached Rs 40,509 crores during the last four days. Leading large caps like RIL, HDFC bank, and ICICI bank, major holdings in the AUM of FIIs, bore the FII onslaught. This correction is an opportunity for long-term investors since the valuations of these stocks are fair and prospects look good. DIIs flush with funds will continue to buy the beaten down quality stocks," V K Vijayakumar Chief Investment Strategist at Geojit Financial Services, said.

Technical View

"The index is now precariously positioned, with the next major support near the 100-period moving average (MA) at 24,300, followed by the crucial 200-period MA at 23,200. The Sensex has declined for five consecutive sessions, with profit booking eroding gains. It has breached the 50-period exponential moving average (EMA) at 82,020, maintaining a cautious sentiment. The next major support lies near the 100-day moving average (DMA) at 79,572," Vaishali Parekh, Vice President of Research at Prabhudas Lilladher, said.

"For the situation to improve, the Sensex would need a decisive move above the 20-DMA level of 83,400, which could signal further upside. Key support for the week is seen at 79,800/24,400, while resistance is at 83,500/25,600," she added.

Key Nifty Gainers

ITC, Bharti Airtel, Bajaj Finance

Key Nifty Losers

Adani Ports, ONGC, and NTPC

Key Sensex Gainers

ITC, Bharti Airtel, Bajaj Finance

Key Sensex Losers

NTPC, Power Grid Corp, Titan Company

Stock Moves

Suzlon Energy: Shares fell to 5 percent, extending losses for the eighth session. The sharp decline of over 12 percent in a week follows an ‘advisory cum warning’ letter issued by BSE and National Stock Exchange (NSE) earlier this month. This letter highlighted concerns regarding corporate governance practices after the resignation of independent director Marc Desaedeleer.

Vodafone Idea: Shares dropped as much as 9 percent on October 7 after the Department of Telecommunications (DoT) reportedly slapped a notice over the non-payment of bank guarantees required to cover past spectrum auction dues. According to a report from The Economic Times, the notice was issued after the telecom operator failed to provide the necessary bank guarantees on time for spectrum dues from auctions held before 2022. Grow Mudra could not confirm the report.