India's benchmark gauge—NSE Nifty 50—fell over 10% from its peak levels in September to enter the so-called 'correction zone' as foreign investors continue their record selloff in domestic stocks.
The gauge of India's blue-chip stocks fell as much as 1.4% on Tuesday to post a 10.04% decline from its record levels on Sept. 27. Meanwhile, the fall in 30-stock Sensex remains just below the 10% level so far.
Automobile and realty stocks took the most beating, while the information technology pack remained the only positive sector, albeit marginally, from the beginning of the foreign selloff.
Nifty Auto and Nifty Oil and Gas fell over 17% while Realty and Energy closely followed them. Media, Metal and FMCG gauges in the National Stocks Exchange fell over 10% from Sept. 27.
Global funds have sold stocks worth over Rs 1.50 lakh crore since Sept. 27, according to provisional data from the National Stock Exchange. Domestic institutions have been net buyers of shares worth Rs 1.38 lakh crore during the same period.
Domestic stocks were "tactically" downgraded to 'neutral' from 'overweight' by Goldman Sachs within its Asia/emerging market allocation, due to slower economic growth and corporate profits.
IndusInd Bank Ltd., Asian Paints Ltd., Bajaj Auto Ltd., Hero MotoCorp Ltd. and Shriram Finance Ltd. led the decline in Nifty since September end, with all of them plunging over 20%. IT bellwethers Wipro Ltd., Tech Mahindra Ltd., and HCLTech Ltd. have remained the only gainers since then.
Among other things, the muted second-quarter earnings by the domestic firms, following a slowdown in the economy pose as a key factor to the cautious approach by investors.
Global brokerage firm Jefferies has cut fiscal 2025 earnings estimates for over 60% of the 98 companies it covers which reported second-quarter earnings, the highest downgrade ratio since early 2020.
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