Sensex Today Tanks 638 Points | Nifty Ends Below 24,800 | 3 Reasons Why Indian Share Market is Falling

Mon, 7 Oct Closing

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After opening the day on positive note, Indian share markets Slipped as the session progressed and ended the day weak.

Benchmark equity indices gave up their initial gains to settle in the red on Monday, led by a sell-off across sectors.

At the closing bell, the BSE Sensex stood lower by 638 points (down 0.8%).

Meanwhile, the NSE Nifty closed lower by 219 points (down 0.9%).

M&M, ITC and Trent were among the top gainers today.

NTPC, SBI and Adani Ports on the other hand, were among the top losers today.

For a comprehensive overview of key players in the financial sector, check out list of Fin Nifty Companies.

The GIFT Nifty ended at 24,958 down by 227 points.

For impact of the Bank Nifty companies and comprehensive overview of the index, check out Equitymaster's Bank Nifty Companies list.

Broader markets ended the day negative. The BSE Mid Cap ended 1.9% lower and the BSE Small Cap index ended 3.3% lower.

Barring IT sector, all other Sectoral indices are trading on negative note with stocks in energy sector, oil & gas sector, metal sector and power sector witnessing buying most selling pressure.

Shares of Coforge, BASF India and Eclerx Services hit their respective 52-week highs today.

Now track the biggest movers of the stock market using stocks to watch today section. This should help you keep updated with the latest developments...

The rupee is trading at 83.98 against the US$.

Gold prices for the latest contract on MCX are trading 0.2% higher at Rs 76,274 per 10 grams.

Meanwhile, silver prices are trading 0.6% lower at Rs 92,765 per 1 kg.

Here are three reasons why Indian Markets are falling today

#1 FPI Outflow

Recent data from the National Securities Depository Limited (NSDL) reveals that foreign portfolio investors (FPIs) have offloaded Indian equities worth Rs 307.2 bn during the first four trading sessions of October.

This significant capital flight appears to be shifting towards China, following the country's recent economic support measures and favourable market conditions.

#2 Oil Prices Surge

Crude oil prices have surged amid concerns over potential supply disruptions from the Middle East, raising significant implications for global markets, particularly for oil-importing countries like India.

Brent crude futures traded at US$ 77.73 per barrel, while US West Texas Intermediate (WTI) crude climbed to US$ 74.21 per barrel.

The increase in crude prices is particularly alarming for India, as it significantly impacts the country's import bill and adversely affects key sectors such as oil, gas, and energy.

#3 State Election

The outcomes of the recent state elections in Haryana and Jammu & Kashmir, while not a needle mover, may keep the markets on edge, as exit polls predicted losses for the BJP in both Haryana and Jammu & Kashmir, MOFSL in its latest strategy note said.

Speaking of the stock market, the Indian stock markets are dealing with two realities that are highly conflicting. First the huge influx of money that is a trend in momentum. Second, frothy valuations.

Sensex PE at 24 may not raise eyebrows yet. But smallcaps, microcaps and SMEs are a different story.

Richa Agarwal, research analyst at Equitymaster talks about how to build a watchlist in SME space in her latest video.

Tune in for more

Reliance Power Hits Lower Circuit

In news from the power sector, shares of Reliance Power continued their decline on 7 October, hitting the 5% lower circuit for the third consecutive session as investors engaged in profit-booking.

The stock is now trading 11% below its 52-week high of Rs 53.6, which it reached last week.

The stock has surged over 60% in the past month, fuelled by strong investor sentiment after the Anil Ambani-led company announced it had become debt-free. After this stellar run, investors rushed to book profits amid a broader market sell-off.

Recently on 18 September, sentiments around the stock strengthened after Reliance Power informed that it has been released and discharged of its corporate guarantee, undertakings and all obligations and claims in relation to the outstanding debt of subsidiary Vidarbha Industries Power Limited (VIPL), amounting to Rs 38.7 bn.

The company said it settled all disputes with CFM Asset Reconstruction Private Limited (CFM), as 100% shares of VIPL have been pledged in favour of CFM against the release and discharge of corporate guarantee given by Reliance Power.

Before that, the company secured a major Battery Storage Contract of 500 MW/1000 MWh from the Solar Energy Corporation of India (SECI).

The contract positions Reliance Power as a key player in one of the world's largest standalone battery energy storage projects.

Why Suzlon Energy Share Price is Falling

Moving on to news from the energy sector, Suzlon Energy shares fell to 5%, extending losses for the eighth straight session. The sharp decline of over 12% 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.

Stock exchanges emphasized that non-compliance with governance standards would be taken seriously moving forward. Suzlon Energy has, however, stated that this advisory does not materially impact its financial or operational activities.

P N Gadgil Jewellers Shares Drop 7%

Moving on, P N Gadgil Jewellers on Monday declined 7% in the early trade on 7 October after the recently-listed company reported a nearly 35% sequential decline in its consolidated net profit at Rs 353.2 m in the June 2024 quarter. The company had reported a net profit of Rs 549.2 m in the 31 March 2024 quarter.

It reported a 60% rise in its consolidated PAT YoY in the June 2024 quarter as the company has managed to increase its stores. It had reported a net profit of Rs 221.5 m in the year-ago period.

The total revenue of the company jumped to Rs 16.2 bn in the reporting period from Rs 12.7 bn a year ago.

During the quarter under review, the company's expenses increased to Rs 16.2 bn from Rs 12.3 bn in the same period a year ago. The company's shares were listed at Rs 830 per share on the NSE on 17 September with a premium of 72.9% over the issue price. The issue was subscribed 59.41 times.

PN Gadgil Jewellers Ltd offers a variety of precious metal/jewellery products, including gold, silver, platinum, and diamond jewellery, catering to different price points and designs.

The company's products are mainly sold under its flagship brand, 'PNG', and various sub-brands through multiple channels, including 39 retail stores and various online marketplaces, including websites.

The company had recently announced its new store opening strategy for every Navratri. The company's total number of stores now stands at 43.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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