India's broader equity markets suffered a sharp sell-off in the week ended October 23, with midcap and smallcap stocks recording their steepest weekly declines in 20 months. Rising crude oil prices, escalating geopolitical tensions and sustained selling pressure weighed on investor sentiment, while the market capitalization of BSE-listed companies fell by more than Rs 20 lakh crore.
Nifty Midcap 100 Falls 5.6%, Smallcap Index Drops 7%
The Nifty Midcap 100 declined 5.6% during the week, its steepest weekly fall since October 2024. The Nifty Smallcap 100 dropped more than 7%, marking its worst weekly performance since February 2025.
The benchmark BSE Sensex fell 1,605.44 points, or 2.14%, to close at 74,729.27. The Nifty 50 fell 546.15 points, or 2.25%, to close at 22,600.
Swiggy, KEI Industries, Motilal Oswal Financial Services, Mahindra and Mahindra Financial Services, Suzlon Energy, Bharat Heavy Electricals, Tata Investment Corporation and Exide Industries were among the major midcap laggards, declining between 10% and 25%.
In the smallcap segment, Himadri Speciality Chemical, CreditAccess Grameen, Urban Company, Deepak Fertilisers and Petrochemicals Corporation, Aarti Industries, Ola Electric Mobility, IIFL Finance, Hindustan Copper, Inox Wind, JM Financial, Garden Reach Shipbuilders and Engineers and Reliance Power fell between 12% and 25%.
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Crude Oil Surge Adds to Market Pressure
All sectoral indices ended the week in the red. The Nifty Defence index declined 7%, while the Nifty Consumer Durables index fell 6.4% and the Nifty Capital Markets index dropped 6%. The Nifty Metal, Media and Realty indices lost around 5% each.
Ravi Singh, Chief Research Officer at Master Capital Services, attributed the sell-off to rising crude oil prices, geopolitical tensions and concerns over inflation and India's fiscal deficit. Brent crude crossed the USD 117-per-barrel threshold amid escalating Middle East tensions and supply concerns.
Foreign institutional investors remained net sellers for the ninth consecutive week, offloading equities worth Rs 2,697.37 crore. Domestic institutional investors provided support, purchasing shares worth Rs 10,942.19 crore.
Nifty Outlook Remains Weak
Market experts cautioned that near-term sentiment remained fragile. Nagaraj Shetti of HDFC Securities identified support for the Nifty at 22,300-22,200, with resistance around 22,800.
Vatsal Bhuva of LKP Securities said 22,200 remained a crucial support level, while 22,700-22,800 was the immediate resistance zone. He advised traders to remain cautious and monitor Brent crude prices, noting that a rise above USD 110 could further weaken market sentiment.