Tough week for investors, domestic macros largely favouring Indian stock market

Mumbai, Oct 26 : The stock market experienced a tough week with both Sensex and Nifty facing a significant decline. The main indices, Nifty and Sensex, declined by 2.7 per cent and 2.2 per cent, respectively.

Going forward, domestic macros are largely favouring the market with the unveiling of strong Purchasing Managers' Index (PMI) data and strong economic growth forecast by the Reserve Bank of India (RBI) for FY25, market experts said on Saturday.

India’s manufacturing industry regained growth momentum in October and the acceleration was supported by quicker increases in factory production and services activity. India’s private sector economy continued to showcase robust growth in October, according to the latest HSBC ‘flash’ PMI survey compiled by S&P Global.

This week was challenging for investors and traders as markets saw a broad-based sell-off throughout, with Nifty closing down by over 2.65 per cent, slipping below 24,200 after two weeks of consolidation.

“October has been particularly tough, with the benchmark down more than 6 per cent so far. The hardest hit was in individual stocks, particularly in the mid-cap segment, which has sharply declined over the last couple of weeks,”: said Rajesh Bhosale, Equity Technical Analyst, Angel One.

The week’s focus has been the steep drop in mid-caps, but some selective positive traction could emerge, especially with the festive season. Also, Investors with a long-term view might consider staggered buying of quality stocks from these levels, advised experts.

Investor psychology turned a bit gloomy due to the ongoing geopolitical tensions and a knee-jerk reaction from FIIs, which dragged the sentiment.

The sustained selling by FIIs and lack of triggers in the domestic market may impact the near-term sentiment in the market, said market experts.

However, the resilience of recent manufacturing data suggests the plausibility of an economic recovery in H2 FY25, which should encourage investors to accumulate quality stocks.

“A moderation in valuation, a pickup in earnings in H2 FY25, and an expectation of an RBI rate cut in 2025 will provide support to the market. Sectors to watch include consumption, FMCG, infrastructure, new-generation companies, manufacturing, and chemicals,” experts said.

On Friday, Sensex closed at 79,402.29 after falling 662.87 points or 0.83 per cent. At the same time, Nifty fell 218.60 points or 0.9 per cent to 24,180.80.