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 Stock market fall: Nifty 50 fell 744.35 points this week; know the reason

Indian benchmark indices - BSE Sensex and Nifty 50 fell 662.87 points and 218.60 points on the last trading day of the week on October 25. Sensex settled at 79402.29 and Nifty 50 at 24180.80. The fall in the market on Friday, October 25 was due to continued selling by foreign institutional and portfolio investors (FIIs/FPIs) due to concerns related to high valuations of Indian equities and cheaper alternatives available in markets like China.

On Friday, October 25, the BSE Sensex fell 927 points to hit an intraday low of 79,138, while Nifty 50 fell 325.5 points to 24,074 amid weak market sentiment.

With this, the BSE Sensex fell 2189.30 points or 2.68 percent to close below the 79500 mark. The index had closed at 81,224.75 on Friday, 18 October. And the Nifty fell 744.35 points or 2.98 percent to close below the 24200 mark. The index had closed at 24854.05 on Friday, 18 October.

The benchmark has registered its fourth consecutive weekly decline, its longest slide since August 2023.

Gaurang Shah, chief investment strategist at Geojit Financial Services, attributed this week's decline in stock markets to continued selling by FIIs since the beginning of October and weak quarterly earnings.

FII selling in the month of October has reached the level of around Rs 1 trillion, which is the highest selling by foreign investors in a month.

Q2 results disappointing

Weak earnings in Q2FY25 have also put pressure on the markets in recent times, as revenue growth for the quarter remains disproportionately low. Rating agency Crisil estimates Indian corporate revenue growth for the July-September quarter to be between 5-7 per cent year-on-year (y-o-y), marking the lowest growth in 16 quarters.

The main reason for this slowdown is the stagnant performance in the manufacturing sector, which accounts for 20 per cent of total revenues of Indian corporates.

Broader market decline

The effects of the continued selling by foreign investors has not remained contained to the frontline indices, with broader market indices also feeling the pinch from the selloff and weak sentiment.

Shares of midcap and smallcap companies faced pressure for the second consecutive day, dropping about 3 per cent on the BSE during Friday's intraday trade

in the past seven trading days, the smallcap index has tanked 9 per cent, while the midcap index has plunged 7 per cent.

Global markets

In broader terms, markets in the Asia-Pacific region were mixed on Friday as investors awaited Japan's general election over the weekend. The Nikkei 225 fell 0.6 per cent, while Hong Kong's Hang Seng edged 0.5 per cent higher.

In mainland China, the CSI300 gained 1.71 per cent, while the Shanghai Composite added 0.59 per cent.

Meanwhile, in the mother market, the S&P 500 surged on Thursday as Tesla shares surged nearly 22 per cent, marking its best day since 2013 after the company posted better-than-expected Q3 results.

As a result, the S&P 500 rose 0.21 per cent, while the Nasdaq gained 0.76 per cent. In contrast, the Dow Jones closed 0.33 per cent lower on Thursday.