Sensex Opens Flat Amid ₹93,000 Crore FII Selloff; Hindalco Plunges 6%

Indian stock markets opened on a flat note on Thursday as foreign institutional investors (FIIs) continued to offload Indian equities. The Indian stock indices BSE Sensex started the day at 80,098.30, and the NSE Nifty opened at 24,412.70.

So far in October, FIIs have withdrawn a staggering ₹93,088 crore from Indian equities, as per data from NSDL. This heavy selling is attributed to the high valuations in India compared to cheaper, more attractive markets like China and Hong Kong. According to Dr. V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, "Elevated valuations in India are driving FIIs to shift focus to other markets with more reasonable valuations."

Sector Performance

Metal stocks took the biggest hit, with Hindalco share price declining by 6.10% in early trading. Similarly, FMCG giants faced selling pressure, with Hindustan Unilever share price falling by 4.78%, followed by Nestle India and Britannia Industries' share prices, which dropped by 1.47% and 1.15%, respectively.

On the other hand, banking and healthcare sectors showed resilience. HDFC Bank gained 1.33%, and healthcare stocks like Cipla and Sun Pharma also moved higher by 0.91% and 0.86% respectively. Technology stocks continued their positive momentum with HCL Tech adding 0.76%.

Investors are keenly awaiting quarterly earnings reports from companies like ITC, NTPC, and IndusInd Bank. Power Grid Corporation is also in the spotlight after approving an investment of ₹284 crore for the Rajasthan Transmission System Project.

Market Sentiment

“The domestic market is near oversold territory, with the Nifty RSI at 35, which might signal a reversal soon,” said Vikas Jain, Head of Research at Reliance Securities. Despite this, market experts are cautious as multiple headwinds persist, including weaker-than-expected Q2 earnings, rising U.S. bond yields, and political uncertainties due to upcoming elections.

Technically, 24,600 has emerged as a critical resistance level for Nifty. Sameet Chavan, Head of Research at Angel One, advised caution, stating, "Until we see clear bullish signals, it's wise to avoid aggressive long positions."

Global Market Impact

Global markets are under pressure as Wall Street saw its biggest single-day drop since early September, with the Dow Jones falling by more than 400 points. The U.S. 10-year Treasury yield crossed 4.25%, and the Dollar Index hit a three-month high at 104.

In commodities, gold prices dropped by 1% to $2,722 per ounce due to rising U.S. bond yields. Crude oil showed volatility after U.S. crude inventories rose by 5.5 million barrels, far exceeding expectations of 0.9 million barrels.

Nifty 50 Performance

At the time of writing, the Nifty50 was trading at 24,398.55, down 0.15%, while Sensex remained flat. As of 12:30 PM, Hindalco was trading at a share price of ₹687.40, down 4.14%, reflecting the broader market's cautious mood.