Umair
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Indian benchmark indices, the BSE Sensex and Nifty 50, opened slightly higher on Monday, buoyed by positive cues from Wall Street.
Sensex, Nifty Today
Benchmark Indian equity indices, BSE Sensex and Nifty 50, were experiencing sharp declines on Monday, influenced by mixed global cues.
By 1 PM, the BSE Sensex had fallen 748.14 points, or 0.94%, to 78,474.97, while the Nifty 50 was down by 226.95 points, or 0.95%, at 23,777.80.
In the afternoon session, only three stocks were in the green: Titan (up 1.19%), followed by Bajaj Finance and ICICI Bank. However, the rest of the market was weighed down, with losses led by Tata Steel (down 3.90%), followed by Kotak Mahindra Bank, Power Grid Corp., Asian Paints, and IndusInd Bank.
On the Nifty 50, just five stocks were trading higher, including Apollo Hospitals Enterprises (up 1.52%), Titan, ICICI Bank, Tata Consumer Products, and Bajaj Finance. Meanwhile, losses were driven by Tata Steel (down 4.08%), BPCL, Coal India, Kotak Mahindra Bank, and Trent.
All sectoral indices were trading lower, with the PSU Bank index leading the declines, down 3.40%. The Metal, Realty, Media, and Energy indices had all shed over 2%, while the Nifty Bank, Auto, Financial Services, and FMCG indices were down more than 1%. The IT, Pharma, and Healthcare indices also fell, but by less than 1% each.
The broader markets were equally affected, with the Nifty Smallcap 100 dropping by 2.27% and the Nifty Midcap 100 declining by 1.98%.
India’s volatility gauge, the India VIX, surged by 12.99%.
Market participants are likely to remain cautious as foreign institutional investors (FIIs) continue their selling trend, capitalizing on any market rise, and redirecting funds toward the US markets. This comes after a five-day selling streak in the US, ahead of President-elect Donald Trump’s inauguration and the US Federal Reserve’s upcoming rate-setting meeting.
On Friday, FIIs net sold Indian equities worth Rs 4,227.25 crore, while domestic institutional investors had net bought Indian equities worth Rs 820.60 crore in the previous session.
Global Cues
Asian markets started cautiously on Monday as investors braced for a week packed with economic data that is expected to highlight the relative outperformance of the United States and continue to support the dollar’s ongoing bullish trend.
The key event in the US this week is the December payrolls report, due on Friday, with analysts predicting a 150,000 increase in jobs and an unemployment rate holding steady at 4.2%. This will be preceded by data on ADP hiring, job openings, and weekly jobless claims, as well as surveys on manufacturing, services, and consumer sentiment. Positive data could reinforce expectations for fewer rate cuts from the Federal Reserve, with markets currently expecting only a 40 basis point reduction for 2025.
On Wednesday, the minutes from the Fed’s latest meeting will provide further insight into their future interest rate projections, and at least seven key policymakers, including influential Fed Governor Christopher Waller, are scheduled to speak.
Inflation data from the EU and Germany this week will offer further clarity on potential rate cuts by the European Central Bank, while China’s consumer price report on Thursday is expected to support the case for additional stimulus in the region.
Given the numerous upcoming events, investors remained cautious, and MSCI’s broadest index of Asia-Pacific shares outside Japan edged up by 0.1%.
Among Asian markets, Japan’s Nikkei declined by 1.05%, while South Korea’s Kospi gained 1.12%, amid ongoing political uncertainty. Australia’s ASX 200 advanced by 0.12%, and Hong Kong’s Hang Seng index rose by 0.45%. In mainland China, the CSI 300 dipped by 0.06%, and the Shanghai Composite fell by 0.05%.
Futures for the S&P 500 and Nasdaq were slightly higher in early trade.
Goldman Sachs analysts pointed out that the S&P 500 delivered a total return of 25% in 2024, marking its second consecutive year of gains over 20%. While the rally was concentrated in just five stocks, Goldman expects an additional 11% rise in 2025, driven by a similar increase in earnings. The new earnings season begins on January 15.
The US bond market has faced challenges, with 10-year yields inching up to 4.631%, nearing last week’s eight-month high of 4.641%. This week, investor sentiment will be tested by the sale of $119 billion in new three-, 10-, and 30-year Treasuries.
The climb in yields helped push the dollar index up to 108.950, after rising nearly 0.9% last week to a peak of 109.540. The strong dollar continues to weigh on gold prices, holding the metal at $2,641 per ounce.
Oil prices received support from colder weather in Europe and the US, with a winter storm bringing snow, ice, and freezing temperatures to large areas of the US on Sunday. Brent crude rose by 19 cents to $76.70 per barrel, while US crude added 27 cents, reaching $74.23 per barrel.
