India’s equity market plummeted for the third straight session as weak earnings of large firms weighed on sentiments. A sharp decline in Axis Bank of more than 5% following its results made participants cautious ahead of upcoming earnings from other banking heavyweights, namely HDFC Bank and ICICI Bank, which are scheduled over the weekend.
The Sensex closed 501.51 points or 0.61% lower at 81,757.73, and the Nifty settled 143.05 points or 0.57% at 24,968.40. The broader market also witnessed profit-taking, with the Nifty Midcap and Small Cap indices retreating 0.7% and 0.8%, respectively.
Excluding Media and Metal, all sectoral indices closed in the red, with a pronounced weakness in Pharma, Private Banks, PSU Banks, FMCG, Capital Goods, Consumer Durables, and Telecom, which lost between 0.5% and 1%.
From the Sensex pack, Axis Bank tumbled 5% after reporting a 3% dip in its June quarter consolidated net profit at Rs 6,243.72 crore, impacted by the implementation of changes in non-performing assets and loan upgrade policy.
According to Devarsh Vakil, Head of Prime Research, HDFC Securities, Axis Bank's latest financial results fell short of market expectations. "Notably, Axis Bank's GDR tumbled 4.8 per cent to USD 64.30 on Thursday, following a deterioration in the bank's asset quality during the June quarter," he said.
Bajaj Broking stated that FIIs turning net sellers in July after months of sustained inflows signals a tilt towards global risk aversion and a cautious investment stance. Meanwhile, investor focus has shifted to the Q1FY26 earnings season, where expectations remain subdued, added the brokerage.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,694.31 crore on Thursday, according to exchange data. On Friday, their net purchase stood at Rs 374.74 crore. "There is a clear pattern in FII activity this year so far. They were sellers in the first three months. For the next three months, they turned buyers. And in the seventh month, the trends so far indicate further selling unless some positive news reverses the downtrend in the market," VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, said.
