Mumbai, India – The Indian stock market experienced a downturn today, with both the Sensex and Nifty indices registering significant losses in early trading. The S&P BSE Sensex fell by 300 points, or 0.37%, opening at 84,894. Simultaneously, the NSE Nifty 50 declined by 98 points, or 0.38%, slipping below the 26,000 mark to trade at 25,929. The Nifty 50 index had previously closed at 26,027.30.
Several factors contributed to this market slump. Persistent foreign portfolio outflows, a weakening rupee, and ongoing uncertainty surrounding a trade agreement between India and the United States have created a cautious environment for investors. The rupee hit a fresh all-time low, further dampening market sentiment.
Among the top losers on the Sensex were Eternal, Axis Bank, HCL Technologies, Infosys, and Titan, with their shares declining between 1% and 3%. Broader market indices also felt the pressure, with small-cap stocks down by 0.2% and mid-cap stocks easing by 0.1%.
The Indian stock market has been trading in a range-bound manner for the past two weeks after reaching record highs on December 1st. Investors appear to be awaiting fresh catalysts and greater clarity regarding a potential trade agreement between India and the U.S.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit, noted that the market is currently in a consolidation phase in the near term. He added that sustained selling by Foreign Institutional Investors (FII) is being absorbed by Domestic Institutional Investor (DII) buying, and strong economic fundamentals suggest the market will find support during dips.
Concerns surrounding the rupee's weakness have also contributed to the market's decline. The rupee opened at 89.96 against the US dollar and further declined to 90.1325, marking a record low. This decline is attributed to continuous equity outflows, uncertainty related to the India-US trade deal, and repeated delays in timelines.
Technically, the recent fall in the Nifty can be attributed to adjustments in the Bank Nifty and concerns surrounding the rupee. According to Vijayakumar, the weightage reduction of HDFC Bank and ICICI Bank is purely technical and not related to their fundamentals.
Market breadth reflected the negative sentiment, with more stocks declining than advancing. At 10:20 am, 1,145 shares advanced, 2,113 declined, and 160 remained unchanged.
While the overall sentiment remains cautious, some sectors showed resilience. IT stocks, including Wipro and Tata Consultancy Services (TCS), saw gains, with Wipro rising up to 2%.
