Nifty 50 Slips Below 22,750 as Midcap and Smallcap Selloff Deepens, Investors Lose Ground for Second Session

MUMBAI, India — India's Nifty 50 index fell below 22,750 on Wednesday after a strong opening gave way to steady selling. Losses were heavier in midcap and smallcap stocks than in the large-cap benchmark.

The NSE Nifty 50 dropped 150.50 points, or 0.66%, to close at 22,738.45. The BSE Sensex fell 338.55 points, or 0.46%, to 73,514.35.

The Nifty fell more in percentage terms than the Sensex. That suggests selling was broader than the Sensex's 30 large companies, which are generally more stable.

A sharp reversal

The Nifty opened at 23,016, above Monday's close of 22,888.95. Early on, it looked like the index might recover some of the previous session's losses. Instead, sellers took control by midday. By 1 p.m., the Nifty was down about 144 points, and by 3 p.m. the loss had grown to more than 200 points.

The index touched an intraday low of 22,702.85 before recovering slightly to close just above that level.

Broad-based weakness

The pressure was strongest outside the largest companies. Late in the session, the Nifty MidCap 100 had fallen 1.82% and the Nifty SmallCap 100 was down 2.48%, more than three times the Nifty 50's decline.

Banking stocks also weighed on the market. By early afternoon, the Bank Nifty was down about 1.25%, continuing its weakness from Monday, when private lenders fell after their quarterly results. On Monday, the Bank Nifty lost 355.90 points, or 0.64%, to 55,488.10. Losses in major private banks outweighed gains in state-run lenders.

Defense stocks were also weak. Dynamatic Technologies, Apollo Micro Systems and Axiscades Technologies led losses in the Nifty India Defence index, with some stocks falling as much as 6%.

Technology stands out

Information technology was the best-performing sector. The Nifty IT index rose to an eight-month high of 32,348, led by Infosys and Tata Consultancy Services. L&T Technology Services jumped about 15%.

IT stocks have benefited as investors move into large, export-oriented companies seen as better protected from domestic economic weakness. A recent recovery in global technology sentiment has also helped.

Earnings season drives volatility

Second-quarter results continue to move individual stocks sharply. Eternal, which owns Zomato, was among the biggest losers in the Nifty 50, falling about 4.5% ahead of its results. Bajaj Finance and Eicher Motors also declined.

Several stocks outside the main index swung sharply on their quarterly numbers. Vishal Mega Mart and Just Dial each fell about 6% after weaker results. eMudhra hit its 20% lower circuit after reports raised concerns about some certificate authorities used in its global business. Piramal Finance and Hindustan Zinc rose about 4% each.

Second straight loss

Wednesday's decline adds to Monday's selloff, when the Nifty fell 257.20 points, or 1.11%, and closed below 22,900. Over the two sessions, the index has lost about 408 points.

The Nifty's next major reference point is its Oct. 9 close of 22,520.45. Traders are watching whether the index can hold above the 22,700 to 22,800 range, which held during Wednesday's session.

Jio Platforms IPO opens

Investor attention was also on the initial public offering of Jio Platforms, the telecom and digital services arm of Reliance Industries. The offer opened Wednesday and was subscribed 2.22 times by mid-afternoon. Institutional investors showed the strongest demand, subscribing 6.72 times their portion. Retail investors had subscribed just over half of the shares set aside for them.

Global and macro pressures

Several global factors have made Indian investors cautious. Crude oil remains near $98 a barrel because of supply concerns in the Middle East, a significant risk for India since it imports most of its oil.

U.S. inflation came in hotter than expected last week, reviving concerns that global interest rates will stay high and possibly weakening foreign investor demand for emerging markets.

Elsewhere in Asia on Wednesday, Hong Kong's Hang Seng fell 0.9% and China's Shanghai Composite dropped 0.6%, while some regional chipmakers rose on strong U.S. AI earnings.

Outlook

Analysts expect earnings to remain the main driver of the market in the near term. Upcoming results from banks, consumer companies and industrial firms will be closely watched, along with U.S. tech earnings from Meta Platforms and Tesla this week.

For the Nifty, the immediate challenge is to hold support near current levels. A sustained move below 22,700 could lead to further selling, while a recovery in banking stocks could help stabilize the broader market.