Stock Market Today (October 26): Sensex Slumps Over 500 Points; Expert Flags Inflation, Liquidity Risks

Both the Nifty and the Sensex began the trading day and week on a weak note. The Nifty declined over 130 points and opened at 22,524.40 and the Sensex declined over 500 points and opened at 72,990.04. All sectoral indices traded lower in early trade, with small cap and midcaps continuing to face pressure. The Indian rupee opened at 94.93 to the dollar versus Friday’s close of 94.94 to the dollar. Crude oil prices eased marginally after hitting six-month highs, Brent crude prices had crossed 117 dollars per barrel; however currently prices remain above 114 dollars per barrel (at the time of filing this copy).
G. Chokkalingam Head of Research at Equinomics Research told Times Now Digital, “rising inflation and lack of adequate liquidity remain a cause of some concern for the secondary markets. India’s crude oil import bill surged 47 percent to 15.4 billion dollars as the Indian basket of crude oil spiked 67 percent year-on-year in September. The 10-year benchmark bond yield G-Sec hit a three-and-a-half year high; the RBI’s Monetary Policy Committee (MPC) signalled that rate cuts are off the table in the near-term. Minutes of RBI’s October meeting show members increasingly concerned about inflation spreading beyond food and fuel. Water storage in India’s key reservoirs dropped further to 67 percent of capacity last week, increasing the concern on crop output and on crop prices. Weakness in the stock markets may continue this week. However as market lost huge value last week some marginal recovery may be possible today. The medium to long term outlook for stock markets remains firm due to strong growth outlook and attractive valuation of Indian markets.”
Analysts remain cautious about the near-term market outlook, flagging rising inflation and inadequate liquidity as key concerns. Elevated crude oil prices, persistent foreign investor outflows and geopolitical uncertainties could weigh on investor sentiment.