Closing bell: Stock markets end lower as HUL falls sharply, FII outflows continue

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Stock markets extended their downward trend for the fourth consecutive session on Thursday, closing slightly lower as continued foreign fund outflows and lacklustre quarterly earnings from Hindustan Unilever (HUL) weighed on investor sentiment.

In a day marked by lacklustre trading, the BSE Sensex dropped by 16.82 points, or 0.02 per cent, settling at 80,065.16. Throughout the session, the Sensex fluctuated between a high of 80,259.82 and a low of 79,813.02, a movement of 446.8 points. The NSE Nifty, on the other hand, fell by 36.10 points, or 0.15 per cent, to close at 24,399.40 amid volatile market conditions.

Among the 30 constituents of the Sensex, Hindustan Unilever was the worst performer, plummeting nearly 6 per cent. This sharp decline came after the FMCG giant posted a 2.33 per cent drop in consolidated net profit for the second quarter of FY24, recording a profit of Rs 2,595 crore. According to PTI, the company's performance was adversely affected by weaker demand from urban markets, further dampening investor confidence.

Other notable losers included Nestle, ITC, Maruti Suzuki, Asian Paints, Infosys, Tata Consultancy Services (TCS), Larsen & Toubro, and HCL Technologies, which all recorded losses. However, some stocks managed to buck the downward trend, with UltraTech Cement, Mahindra & Mahindra, Titan, Adani Ports, State Bank of India, and Power Grid emerging as gainers for the day.

One of the main factors contributing to the market's ongoing slump is the continuous selling by Foreign Institutional Investors (FIIs). On Wednesday alone, FIIs offloaded equities worth Rs 5,684.63 crore, as per exchange data, while Domestic Institutional Investors (DIIs) provided some support by purchasing equities worth Rs 6,039.90 crore. According to PTI, FII selling has been substantial, with figures reaching Rs 93,088 crore by 23rd October.

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, explained that the major headwind for the market is the significant and sustained selling by FIIs. "The fundamental reason for this outflow is the high valuations in India compared to more attractive and cheaper valuations in markets such as China and Hong Kong," he noted. Vijayakumar added that the market is struggling to reconcile the current elevated valuations with the lack of growth in earnings, which has turned the market structure into a "sell on rally" situation in the near term.

In international markets, Asian stock indices had a mixed performance. Seoul, Shanghai, and Hong Kong closed lower, while Tokyo posted gains. European markets, however, were trading in positive territory during the afternoon session. The US markets ended in the red on Wednesday, continuing the global trend of uncertainty.

In the commodities market, Brent crude prices rose by 1.99 per cent, reaching USD 76.45 per barrel.

On Wednesday, the BSE Sensex had declined by 138.74 points, or 0.17 per cent, closing at 80,081.98. Meanwhile, the Nifty had dropped by 36.60 points, or 0.15 per cent, to end the day at 24,435.50.

(With inputs from PTI)