After opening the day on a positive note, Indian share markets Slipped as the session progressed and ended the day weak.

Benchmark Indian equity indices BSE Sensex and Nifty 50 were trading deep in the red on Tuesday.

At the closing bell, the BSE Sensex stood lower by 931 points (down 1.2%).

Meanwhile, the NSE Nifty closed lower by 309 points (down 1.3%).

ICICI Bank was among the top gainers today.

Adani Enterprises, M&M, and Coal India on the other hand, were among the top losers today.

The GIFT Nifty ended at 24,526 down by 253 points.

Broader markets ended the day negative. The BSE Mid Cap ended 2.5% lower and the BSE Small Cap index ended 3.8% lower.

Sectoral indices are trading on a negative note with stocks in the metal sector, realty sector, and power sector witnessing buying most selling pressure.

Shares of Torrent Power and Indigo Paints hit their respective 52-week highs today.

The rupee is trading at 84.04 against the US$.

Gold prices for the latest contract on MCX are trading 0.2% higher at Rs 78,252 per 10 grams.

Meanwhile, silver prices are trading 0.9% higher at Rs 98,289 per 1 kg.

Here are three reasons why Indian Markets are falling today

#1 Smallcap Stocks Drag

Shares of smallcap companies have continued trading under pressure, with the BSE SmallCap index falling 2% in Tuesday's intra-day trade, led by a persistent selling by foreign institutional investors (FIIs) coupled with muted domestic earnings.

BSE Smallcap index, the top loser among the broader market indices, slipped 1,261 points or 2.3% at 54,387. In comparison, the BSE Midcap index and BSE Sensex were down 1.3% and 0.4%, respectively

#2 Tensions in the Middle East

Tensions in the Middle East remain elevated, keeping investors on tenterhooks. According to a Reuters report, "Hezbollah said it had fired rockets at two bases near Tel Aviv and one west of Haifa on Tuesday morning just hours before US Secretary of State Antony Blinken arrived in Israel to make another push for an elusive ceasefire."

#3 Index Heavyweights Falling

Mahindra & Mahindra (down 2.96 percent), followed by Tata Motors, Tata Steel, IndusInd Bank, and Maruti Suzuki India, were the top drags.  On the Nifty 50, 41 stocks out of the 50 were trading in the red.

#4 Sectoral pressure

Across sectors, the PSU Bank index (down 3.59 percent), followed by the Realty index (down 3.39 percent) were the top sectoral laggards. Meanwhile, the Metal, Auto, Consumer Durables, and Oil & Gas indices were down between 2 and 3%.
 

Why Shipbuilding Stocks are Falling

In news from the shipbuilding sector, shares of shipbuilding companies were under pressure, falling up to 10% on the BSE in Tuesday's intra-day trade amid growth concerns.

Mazagon Dock Shipbuilders (MDL) tanked 10% to Rs 4,206.55, while, Garden Reach Shipbuilders & Engineers (GRSE) plunged 9% to Rs 1,643 and Cochin Shipyard (CSL) was locked at the 5% lower circuit at Rs 1,453.8.

Among individual stocks, CSL was locked at 5 percent lower circuit on the BSE. Last week, the government sold a 5 percent stake or 13 m shares in CSL via offer for sale (OFS). The share sale was to fetch about Rs 20 bn to the exchequer.

The main risks include the potential for weaker-than expected global GDP growth or geo-political developments causing adverse dislocations.

A potential increase in trade protectionism (or "friend-shoring") could also see changes in trade flows and limit demand across a few high-margin or critical products.

However, shipbuilding activity is likely to show robust performance due to the current healthy order book and the need for new tonnage to meet new rules and regulations, replace an aging fleet (above 14 years), and cope with the additional ton miles that exploded in 2023.

Additionally, the need to reduce speed to comply with intermediate requirements (such as the CII) and the potential for a new super cycle in the shipbuilding industry to replace all the ships delivered in large numbers between 2005 and 2010 suggest a very similar global figure to last year.
 

Supreme Industries Sinks 10%. Here's Why

Moving on, Supreme Industries shares tanked up to 10% at Rs 4,479.65 per share on the BSE after the company delivered muted quarterly earnings for the second quarter of the financial year 2024-25 (Q2FY25).

In Q2FY25, the company reported a revenue de-growth of 1.6% year-on-year, reaching Rs 22.7 bn, down from Rs 23.1 bn in Q2FY24. Sequentially revenue fell by 13.4%.

Profit After Tax (PAT) decreased by 15 percent, reaching Rs 219 crore in Q2FY25 from Rs 2.6 bn in the same quarter last year.

Earnings before interest, taxes, depreciation, and amortization (Ebitda) dropped by 10.4% year-on-year to Rs 3.2 bn in Q2FY25 from Rs 3.6 bn in the same quarter last year. Ebitda margins dropped to 14.1% versus 15.4% in Q2FY24.

The company informed that it continues to be debt free and has a cash surplus of Rs. 6.7 bn as of 30 September 2024.

The Board of Directors of the company has declared an interim dividend of Rs 10 per share of Rs. 2 each, for the financial year 2024-25. The Dividend will be paid to those shareholders whose names stand on the register of members as on the record date i.e. 30th October 2024.

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