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Below the Quote on Market by Krishna Appala, Sr. Research Analyst, Capitalmind Research

The market extended its negative trajectory for the third consecutive week, with the Nifty 50 down 5.2% from its recent peak. On a weekly basis, the Nifty 50 declined by 0.4%, while the CNX Midcap dropped 0.7%, and the CNX Smallcap showed a modest gain of 0.5%.

The earnings season has kicked off on a muted note, with companies like TCS and Bajaj Auto reporting underwhelming numbers. A negative surprise came from Bajaj Auto’s commentary, where they indicated that initial demand during the festive season has been weak for the auto sector. This sentiment is supported by the broader lending data, showing a drop in consumer loans and credit card demand. In August 2024, demand for consumer loans fell by 13% and credit card loans by 12% compared to the previous year. Approval rates for consumer loans also declined significantly, from 33% in May 2023 to 26% in May 2024.
On the corporate side, growth seems to be coming from wholesale lending, as corporate balance sheets remain at record low leverage levels, with strong participation in QIPs. However, retail lending faces challenges, as the RBI has issued caution around yields and over-lending, while fiscal and monetary tightening has kept consumption growth in check. The slowdown in growth, combined with narrowing net interest margins (NIM), suggests that banks and NBFCs could face continued correction for the next few quarters.
So far, robust DII and SIP inflows have sustained the market's strength. However, if corporate earnings fail to match the high valuations, we may see either a price or time correction in the broader market to stabilize things.

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