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Indian Stock Market Extends Slump for Third Consecutive Day

The Indian stock market experienced a weak session on Friday, April 23, with key indices continuing their downward trend for the third consecutive day. This decline was driven by broad-based selling in technology stocks, which was exacerbated by the unfavorable global sentiment. The tensions in the Middle East flared up again, causing crude oil prices to approach recent highs and intensifying concerns over inflation.

As a result, the Nifty slipped 1.10% to fall below the 24,000 mark, settling at 23,907. The S&P BSE Sensex also ended at 76,670, down 1.28% from Thursday's close. The broader markets remained weak, with both the Nifty Midcap 100 and Nifty Smallcap 100 indices declining up to 1%.

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Heavy selling was observed across the technology pack, as weak earnings spooked investors and dragged the Nifty IT index down 5.3%. The Nifty Media and Nifty Pharma indices also declined 1.87% and 1.77%, respectively. Other sectors such as Nifty Realty, Nifty Chemicals, and Nifty FMCG each fell over 0.73%, while Nifty PSU Bank and Nifty Metal ended with marginal losses.

According to Vinod Nair, head of research at Geojit Investments Limited, the Indian equity market extended its profit-booking streak, pressured by heightening geopolitical tensions in West Asia, a sharp rally in crude oil prices, and a weakening rupee. IT stocks led the decline following disappointing quarterly earnings, while selling pressure was broad-based across sectors. Foreign Institutional Investors (FIIs) returned to net selling again after a brief spell of inflows, further denting sentiment. The downgrading of India by global rating agencies on inflation and macro concerns, along with the RBI flagging early signs of slowing growth, added to the woes. While valuations have corrected, investors are expected to closely monitor the ongoing results for any potential earnings downgrade, given the wobbling geopolitical uncertainties.