By Bharath Rajeswaran
(Reuters) -India’s benchmark indexes settled flat for a second consecutive session on Tuesday, following recent sharp falls triggered by concerns over lofty valuations, weak earnings and foreign outflows.
The Nifty 50 ended down 0.06% at 22,945.30, while the BSE Sensex settled 0.04% lower at 75,967.39.
The benchmarks swung between mild gains and losses during the session. The indexes snapped an eight-session losing streak on Monday, the longest since February 2023.
The Nifty 50 is trading about 13% below its record high hit in September 2024 and has fallen 3% so far this year due to lacklustre corporate earnings, an exodus of foreign money, slowing domestic growth and global trade uncertainties.
Smallcaps stocks, which slipped into a bear market on Friday, declined 1.6% on the day, while midcaps lost 0.2%.
“While the steep fall from record-high levels has made the benchmarks cheaper from a valuation perspective, limiting any further downside, investors are staying on the sidelines since there may not be a major near-term upside due to sustained foreign selling,” said Anita Gandhi, founder and head of institution at Arihant Capital Markets.
Elevated valuations and nervousness among some retail and short-term investors over the recent sharp decline and weak earnings could intensify the drop in small and midcaps further, Gandhi said.
Foreign portfolio investors, who have greater exposure to largecaps stocks, have offloaded Indian shares worth $12 billion so far in 2025.
On the day, the consumer index lost 0.9% while auto shares fell 0.6%.
In contrast, the IT index, the second-heaviest sector on the benchmarks, gained about 1% after slipping 4.5% in the last seven sessions.
IT shares were boosted by a 4.7% gain in Persistent Systems after J.P. Morgan reiterated its “overweight” rating on the stock, calling it the fastest-growing IT company in its coverage.
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Janane Venkatraman and Mrigank Dhaniwala and Sonia Cheema)
