Benchmark indices fell on Friday as higher-than-expected inflation in the US dampened prospects of interest rate cuts there. The BSE Sensex closed 230 points lower at 81,381, and the Nifty-50 ended the day with a 34-point decline at 24,964.

During the week, the Sensex fell 0.4 percent while the Nifty fell 0.2 percent. Both indices recorded a decline for the second consecutive week. In the year 2024, the Sensex has recorded a decrease for the second consecutive week on four occasions while the Nifty has done so on three occasions. The last time both indices recorded a decline for two consecutive weeks was in August.

In the US, core inflation based on the Consumer Price Index rose 0.3 percent in September for the second consecutive month. Also, the three-month annual rate stood at 3.1 percent, which is the highest since May. The US inflation figures contradict the recent data that indicated an easing of price pressure.

At the same time, the debate on the amount of interest rate cut by the Federal Reserve has started again. Some analysts think that the Fed can cut the rate by 25 basis points in November. But there will be no cut in the December meeting. The yield on 10-year US bonds rose by 0.9 percent and was trading at 4.09 percent.

Concerns over corporate revenue growth for the September quarter further hurt morale. The country's largest IT service provider Tata Consultancy Services performed poorly in the September quarter. The company's net profit fell 1.1 percent. TCS shares fell 1.8 percent and were the worst performers among Sensex stocks.

VK Vijayakumar, chief investment strategist at Geojit Financial Services, said concerns over earnings downgrades in the second half of FY25 have made valuations of Indian stocks difficult. However, sustained inflows into domestic mutual funds (record Rs 24,500 crore inflows through SIPs in September) will ensure that FII selling is offset by buying by domestic institutional investors.

The trend has been the same so far in October. Indian markets are on a downward trend amid concerns of investment shifting to China and rising geopolitical tensions in West Asia. The direction of the market in the coming times will be decided by income.
Religare Broking Senior Vice President (Research) Ajit Mishra said that the market is facing selling pressure on every rise.

However, strength in key players has slowed the pace of decline. We are advising a cautious stance on Nifty until it crosses the 20-day exponential moving average which is currently at 25,300. With opportunities on both sides, traders should prioritize careful stock selection and effective trade management.

The market had a positive gain-loss ratio with 2,143 stocks advancing while 1,751 declined. Half of the Sensex stocks fell. TCS and ICICI Bank fell 1.6 percent and 0.7 per cent respectively and were the biggest contributors to the Sensex decline. Metal stocks rose as investors expect China to inject $283 billion in fresh stimulus to boost its economy.