Synopsis: Zomato led Sensex losers, dropping by 1.75% to ₹238.75. Major declines were seen in Mahindra & Mahindra, Adani Ports, HDFC Bank, Tech Mahindra, Tata Steel, and ITC. Sensex plunged 761.57 points to 76,617.34, while Nifty dropped 176.10 points to 23,255.40. US jobs data and rising crude oil prices fuelled market concerns. FIIs remain net sellers, and market recovery is anticipated by mid-2025.
Benchmark indices Sensex and Nifty extended their losing streak to a fourth straight session on Monday.
A stronger-than-expected US jobs report raised fears of prolonged higher interest rates, further fueled by crude oil prices surging past $81 per barrel.
Key Market Data:
- Sensex fell 761.57 points (0.98%) to 76,617.34.
- Nifty declined 176.10 points (0.75%) to 23,255.40.
- A significant 162 stocks hit fresh 52-week lows.
Zomato emerged as the top loser on the Sensex, dropping 1.75%. Mahindra & Mahindra, Adani Ports, HDFC Bank, and others also registered declines exceeding 1%.
On the broader front, Avenue Supermarts Ltd (DMart) dipped 2.53%, and Adani Wilmar fell a sharp 7.75% amid its ongoing Offer for Sale (OFS).
Global and Domestic Influences
- US Jobs Data: The December report showed 256,000 job creations, far exceeding expectations of 165,000. This strengthened the dollar index to 110 and dampened hopes of US Federal Reserve rate cuts.
- Crude Oil Prices: Brent crude at $81 remains a significant concern for India's economy.
- Rupee Depreciation: The rupee fell to a fresh low of 86.27, triggering fears of continued foreign outflows.
Sectoral Highlights:
- IT and Pharma Resilience: Strong US economic data could benefit Indian IT stocks. Pharma and healthcare stocks also displayed resilience due to stable demand.
- Consumption Recovery: November IIP data at 5.2% suggests a recovering domestic economy.
Market Sentiments:
According to Kotak Institutional Equities, the reward-risk balance for Indian markets remains poor due to overvalued stocks, challenging earnings upgrades, and persistently high global bond yields.
V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, added, “The market faces headwinds from robust US jobs data and rising crude prices. However, IT and select large-cap banking stocks provide opportunities for long-term investors.”
Outlook and Technical Analysis:
Short-Term Trends:
- Volatility Ahead: ICICI Securities anticipates elevated volatility driven by upcoming Q3 FY25 earnings reports.
- Support and Resistance Levels: Axis Securities highlighted critical Nifty support between 23,177 and 23,355, with immediate resistance at 23,600.
Medium-Term Recovery:
Small and midcap stocks are expected to outperform, driven by an improving earnings outlook.
Conclusion:
The ongoing sell-off in the Indian equity markets highlights the impact of global macroeconomic factors, including US interest rates and crude oil prices.
Despite the near-term volatility, analysts maintain optimism for a gradual recovery in mid-2025, particularly in small and midcap segments.
Long-term investors might find this an opportune time to accumulate quality stocks at reasonable valuations.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Readers are advised to consult a qualified financial advisor before making any investment decisions.
