Sensex and Nifty Decline Amid Global Weakness and Foreign Fund Outflows
Indian stock markets, Sensex and Nifty, faced a decline due to global economic weaknesses and sustained foreign fund outflows. Investors are cautious amid global uncertainty, impacting market sentiment.
Mumbai: Indian stock markets experienced a sharp decline on Monday as the Sensex and Nifty tumbled in early trade.
The fall was driven by weak global trends, foreign fund outflows, and rising crude oil prices, which dampened investor sentiment. Additionally, strong U.S. jobs data tempered expectations for early rate cuts in 2025, adding to the bearish mood.
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Market Performance Overview
The 30-share BSE Sensex plummeted by 843.67 points to reach 76,535.24 in early trade, while the NSE Nifty dropped 258.8 points to 23,172.70. This significant decline reflects the mounting pressures on the Indian equity markets.
Sectoral and Stock Highlights
From the 30-share blue-chip pack, the major laggards included:
- Asian Paints
- Zomato
- Mahindra & Mahindra
- HDFC Bank
- Bajaj Finance
- Kotak Mahindra Bank
- Tata Steel
Conversely, some stocks managed to remain in positive territory, including:
- IndusInd Bank
- Axis Bank
- Tata Consultancy Services (TCS)
- Hindustan Unilever
Global Market Sentiment
Asian markets, including Seoul, Shanghai, and Hong Kong, were trading lower, reflecting a widespread global downturn. U.S. markets also closed in negative territory on Friday, exacerbating the risk-off sentiment.
Foreign Fund Outflows
Foreign Institutional Investors (FIIs) continued to offload equities, selling shares worth Rs 2,254.68 crore on Friday, according to exchange data. This brings the total foreign investor withdrawals from Indian equities to Rs 22,194 crore so far in January 2025, highlighting persistent concerns over market stability.
Also Read | Market Outlook: Q3 Results, Inflation, and Economic Cues to Guide Next Week
Key Influencing Factors
- Rising Brent Crude Prices: The global oil benchmark Brent crude rose by 1.62% to USD 81.05 a barrel. This increase is a cause for concern for India, a major oil importer, as it could impact inflation and trade deficits.
- Strong U.S. Jobs Data: The U.S. economy reported 2.56 lakh job creations in December 2024, significantly exceeding expectations of 1.65 lakh. This strong performance reduced the likelihood of multiple rate cuts in 2025, unsettling global equity markets. The U.S. unemployment rate dropped to 4.1%, signaling robust economic health that diminishes the need for fiscal stimulus.
- India’s Industrial Production Data: India’s industrial production (IIP) growth surged to a six-month high of 5.2% year-on-year in November 2024. This recovery, driven by festive demand and improved manufacturing sector performance, provided a silver lining amid broader market concerns.
Expert Insights
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, commented on the market dynamics:
“The market will continue to face pressure from strong headwinds. The blowout U.S. jobs data and rising Brent crude prices pose significant challenges. However, the IIP data for November at 5.2% indicates that the Indian economy is recovering from the slowdown in Q2.”
Recent Market Trends
On Friday, the BSE Sensex had already shown signs of weakness, declining by 241.30 points (0.31%) to settle at 77,378.91. Similarly, the Nifty dropped 95 points (0.40%) to end at 23,431.50. These trends underline the ongoing struggles faced by the Indian equity markets.
