Markets open lower on global selloff; Bihar election outcome in focus

New Delhi: Equity benchmark indices Sensex and Nifty opened on a weaker note on Friday as weak global market trends and jitters ahead of the Bihar election outcome weighed on the investor sentiment.

Traders said continuous foreign fund outflows also dampened the sentiment for investors.

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The 30-share BSE Sensex benchmark declined 303.63 points, or 0.36 percent, to 84,175.04 in early trade. The 50-share NSE Nifty depreciated by 82.65 points, or 0.32 percent, to 25,796.50.

Among the Sensex firms, Tata Motors Ltd's commercial vehicles business, Infosys, Tata Steel, Tech Mahindra, Tata Motors Passenger Vehicles, HCL Technologies, ICICI Bank, Tata Consultancy Services, ITC, HDFC Bank, Maruti Suzuki India, Larsen & Toubro, and Bharti Airtel were the laggards.

Eternal, Bharat Electronics Ltd, Axis Bank, Sun Pharmaceuticals, State Bank of India, Asian Paints, Adani Ports, Trent, NTPC and Bajaj Finance were the gainers.

"The market will be focused on the Bihar election outcome today. But the market reaction to the election results will be only temporary, whatever the results might be. The medium to long-term trend of the market will be dictated by fundamentals, particularly the earnings growth.

"On this front there is room for optimism as indicated by prospects of robust GDP growth and improving earnings growth. " VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, said.

Vijayakumar further stated that India's underperformance this year is unlikely to last. It is important to understand that despite the big underperformance of Nifty, so far this year, Nifty continues to be the best performing index among the large markets of the world during the last 5-year period.

"The dip in corporate earnings in FY25 and the elevated valuations have been weighing on the market this year. This market construct is set to change for the better, going forward," he said.

Broader Asian equities were trading lower. South Korea's Kospi declined 2.2 percent, Japan's Nikkei 225 index decreased 1.7 percent, Hong Kong's Hang Seng fell 1.4 percent and Shanghai's SSE Composite index slipped 0.16 percent.

The US markets ended largely lower in overnight deals on Thursday.

"The Nasdaq plummeted 2.3 percent, the S&P 500 plunged 1.7 percent, and the Dow tumbled 1.7 percent, posting their steepest decline in over a month. The weakness on Wall Street may have reflected uncertainty about whether key US economic indicators would be released after the most extended government shutdown in US history," Devarsh Vakil, Head of Prime Research, HDFC Securities, said.

He noted that Federal Reserve policymakers in recent days have signalled hesitation about further interest rate cuts, pushing financial market-based odds of a reduction in borrowing costs in December to near even.

"Asian shares joined a global selloff on Friday as hawkish comments from Federal Reserve officials doused hopes for a US rate cut next month," Vakil said.

Meanwhile, foreign institutional investors remained net sellers for the fourth day in a row and offloaded equities worth Rs 383.68 crore on Thursday.

Domestic institutional investors sustained their buying spree and picked up stocks worth Rs 3,091.87 crore, according to exchange data.

The 30-share BSE Sensex ended with a gain of 12.16 points at 84,478.67. The broader NSE Nifty closed the session in green with just 3.35 points, at 25,879.15.

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