Indian stock markets opened on a muted note on Wednesday, with major indices showing minimal movement as gains in Bajaj Finance were offset by broader profit-booking across sectors. Investors reacted cautiously to lackluster corporate earnings reports and continued foreign outflows, which have weighed on the market’s recent performance.
Bajaj Finance Lifts Nifty Despite Broader Market Weakness
The NSE Nifty 50 rose by a modest 0.1% to 24,487.2 points at 9:24 a.m. IST, while the S&P BSE Sensex inched up by 0.06% to 80,304 points. The slight uptick in these indices came mainly from Bajaj Finance, which emerged as the top gainer on the Nifty 50, rising 2.5% post its quarterly results.
Bajaj Finance’s management indicated that credit costs had peaked in the first half of fiscal 2025, giving investors confidence that the company’s earnings growth would pick up in the coming quarters. This news was well-received by analysts, who viewed it as a signal of a potential rebound in the financial sector.
Market Snapshot
| Index | Opening Value | Percentage Change |
|---|---|---|
| NSE Nifty 50 | 24,487.2 points | +0.1% |
| S&P BSE Sensex | 80,304 points | +0.06% |
| Nifty Small-Cap 100 | N/A | -0.1% |
| Nifty Mid-Cap 100 | N/A | -0.04% |
Profit-Taking Amid Sluggish Earnings and Foreign Outflows
Despite Bajaj Finance’s performance, broader market sentiment remained subdued as profit-booking continued. Both the Nifty 50 and the Sensex recorded their worst single-day sessions in three weeks on Tuesday, primarily driven by slowing corporate earnings reports. Investors are growing cautious, with many opting to book profits after the indices reached record highs in late September.
Another factor contributing to market weakness is the sustained foreign outflows from Indian equities, now in their 17th straight session. With investors shifting funds to China in response to newly announced stimulus measures and more attractive valuations, Indian markets are feeling the pressure. Foreign outflows from Indian equities are on track to hit a record monthly high for October, further dampening sentiment.
Factors Driving Foreign Outflows:
- China’s Stimulus: Recent stimulus measures announced by China have attracted global investors.
- Valuations: Indian stocks are perceived as overvalued compared to their Chinese counterparts.
- Profit-Taking: Investors are locking in gains following a strong rally earlier this year.
Small- and Mid-Cap Stocks Face Pressure
While major indices remained largely flat, small- and mid-cap stocks saw further declines. The Nifty Small-Cap 100 and Nifty Mid-Cap 100 both dropped by 0.1% and 0.04%, respectively, as profit-taking in domestically focused companies weighed on their performance.
Zomato, the popular food delivery platform, was among the worst performers, plunging 4.3%. The company missed its second-quarter profit estimates, with expansion costs putting pressure on its margins. The negative earnings surprise led to a sell-off in Zomato shares, contributing to the weakness in mid-cap stocks.
Outlook for Indian Markets
The broader market has experienced a spate of profit-taking since hitting record highs on September 27, with the Nifty 50 shedding about 7% from its peak. The slowing pace of corporate earnings growth, coupled with persistent foreign selling, suggests that volatility may continue in the near term.
Despite this, some analysts remain optimistic about the market’s long-term outlook. Bajaj Finance’s strong performance is seen as a positive indicator for the financial sector, and there is hope that as credit costs stabilize, more financial companies will follow suit in delivering strong earnings growth.
