The sell-off in Indian stocks shows no signs of slowing down, as bearish sentiment continues to grip the market. During the session on Friday (October 25), the Nifty 50 index, which represents the country’s 50 largest companies across various sectors, fell another 1.25 per cent, or 295 points, to 24,093.

Today’s decline pushed the index to its lowest level since mid-August, representing an 8.3% correction from its recent high of 26,277, which it touched in late September . In the month of October alone, the index experienced a decline of 6.60%, marking the largest monthly decline since March 2020.

In particular, downward pressure in October was largely confined to Indian stocks, while Asian stocks continued their upward momentum. At the same time, US markets recovered strongly, reaching new records, driven by strong corporate profits and robust economic data.

35 Nifty 50 stocks fall as much as 39% from one-year highs

This recent selloff led 35 index components to trade between 10% and 39% below their recent one-year highs, according to Trendlyne data. Among this list, IndusInd Bank is leading, trading 39% below its recent high of ₹1,694. In today’s trading alone, the stock fell nearly 20%, marking the biggest intraday decline in recent times after disappointing investors with its September quarter results.

Adani Enterprises is another stock down 28% below its recent one-year high of ₹3,743.90 per share. Adani Ports & SEZ is trading down 18.73% from its recent highs.

On the other hand, Tata Motors shares have been in a downward spiral for the past two months. In September, shares fell 12.30%, marking the biggest monthly decline in two years. This downward trajectory continued into October, with the stock falling another 11.36% so far this month.

At current levels, Tata Motors is trading at a 27% discount from its recent high of ₹1,179. The persistent decline in sales volume, combined with cautious analyst outlook due to falling demand for passenger vehicles (PV), has had a negative impact on investor confidence, leading to a substantial price correction of action.

Other Tata Group stocks, including Tata Consumer Products, Tata Steel, Titan Company and Trent, are trading 22%, 21%, 16.13% and 13.37% below their respective one-year highs.

At the same time, shares of automakers such as Maruti Suzuki and Mahindra & Mahindra also fell, falling 16.54% and 15.55% from their 52-week highs, respectively. Two-wheeler makers like Bajaj Auto and Hero MotoCorp are trading at discounts of up to 22%.

FMCG giants Nestlé India and Hindustan Unilever also saw sharp corrections after reporting their recent September quarter numbers, with their shares now trading down 18% and 17% respectively from their recent highs of 52 weeks.

The FMCG sector has been the worst-performing sector index this month, plunging 10% so far, marking its biggest monthly decline since 2008. Even at the height of the COVID pandemic -19 in March 2020, the index only fell 7%, due to its typically defensive nature. However, it is now struggling to withstand the intensity of the recent sell-off.

What is behind the recent weakness in the Indian market?

The recent fall in Indian stocks is largely due to weak September quarter results in key sectors. FMCG companies, hampered by slowing rural consumption, reported lower-than-estimated profits, while banks face significant slippage and deteriorating asset quality, both factors that have destabilized investors.

Automakers also face slowing sales growthparticularly among automakers, with subdued projections for the upcoming holiday season further dampening investor confidence and triggering major sell-offs in the auto sector.

However, the IT sector shows some positive dynamics. Demand in key markets like the United States and Europe is gradually recovering and central banks have started to ease interest rates, a sign of greater stability.

Strong profits at global investment banks, a major revenue source for IT companies, also boosted investor confidence, providing some resilience in an otherwise turbulent market.

At the same time, weak earnings and Chinese stimulus measures also boosted sales by foreign portfolio investors (FPIs). In October alone, FPIs withdrew a file ₹97,205 crores from the Indian marketmarking the largest monthly release on record.

Additionally, growing tensions in the Middle East, fading hopes of a substantial rate cut by the US Federal Reserve, extreme valuations, a strong rebound in Chinese stocks and uncertainty surrounding the upcoming US elections are also weighing on the markets.

Disclaimer: The opinions and recommendations given in this article are those of individual analysts. These do not represent the opinions of Mint. We advise investors to seek advice from certified experts before making any investment decisions.