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<p>Benchmark indices in India experienced sharp declines on Wednesday as the ongoing FII sell-off and weak corporate earnings continue to weigh heavily on Dalal Street.</p> <p>The S&P BSE <a href="https://www.indiatoday.in/business/story/stock-market-downturn-sensex-down-600-points-nifty-tumbles-4-factors-behind-dalal-street-weakness-2632706-2024-11-13" target="_self">Sensex dropped 1,065.31 points to 77,609.87 by 3:03 pm</a>, while the NSE Nifty50 tumbled 334.78 points to 23,548.65, marking yet another session of substantial losses.</p> <p>The current market slump is largely driven by foreign institutional investors (FIIs) withdrawing substantial amounts from Indian equities, a trend that began in October.</p> <p>Since then, FIIs have pulled out a record Rs 1.2 lakh crore, spurred by factors like the surging dollar index and rising US bond yields, which are attracting capital away from emerging markets.</p> <p>Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, remarked, “With US 10-year bond yields reaching 4.42%, more outflows are expected from emerging markets, posing a consistent headwind for India.”</p> <h3><strong>TECHNICAL OUTLOOK CONCERNS</strong></h3> <p>On the technical front, analysts note that the Nifty is trading near its 200-day moving average (DMA), appearing oversold, which suggests a temporary bottom could be near the 23,500 mark. However, key resistance around 24,500 may cap any relief rally. Santosh Meena from Swastika Investmart commented, “While a relief rally in Nifty and Bank Nifty is possible, Midcap and Smallcap indices may still face further downside risk.”</p> <p>For now, analysts recommend cautious optimism as the Indian market grapples with global pressures and internal headwinds, while awaiting signs of stabilization in the months to come.</p> <h3><strong>RETAIL INFLATION WORRIES</strong></h3> <p>Another factor that has hurt sentiments on Dalal Street is the sharp rise in retail inflation in October. Retail inflation rose to 6.21% last month, <a href="https://www.indiatoday.in/business/story/retail-inflation-rises-to-621-in-october-2632249-2024-11-12" target="_self">reaching a 14-month-high</a>. This has dampened the hope of a potential rate cut this year, with the Reserve Bank of India (RBI) back on the drawing board in terms of controlling inflation.</p>
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