Bears Color Market Red Ahead of Christmas
Mumbai: The Indian stock market witnessed a sharp decline on Friday with the BSE Sensex plummeting 1,176 points or 1.49 per cent to close at 78,041.59 while the NSE Nifty dropped 364.20 points or 1.52 per cent to end at 23,587.5 as market sentiment remained cautious after the US Federal Reserve projected fewer rate cuts next year prompting foreign investors to flee local equities and take shelter in safe-haven dollar assets. The market capitalization of all listed companies on the BSE decreased by Rs 10.15 lakh crore to Rs 440.99 lakh crore. Indian investors have lost a massive Rs 18.43 lakh crore during the five days ending December 20, 2024, according to BSE data. The week’s last trading session ended in favour of the bears, with 45 out of the constituent stocks of the Nifty50 ending in red. The worst performers were Tech Mahindra, IndusInd Bank, Mahindra and Mahindra, Axis Bank and Trent with losses of about 3.90 per cent. Stocks namely Dr Reddy’s Lab, Titan, Nestle India, HDFC Life Insurance and ICICI Bank managed to close in green with gains of up to 1.49 per cent. The Nifty50 finished the week below 200 simple moving average marking a total loss of nearly 5 percent. Foreign institutional investors (FIIs) have sold Rs 12,230 crore worth of Indian equities over the past four sessions. December has now seen FIIs turning net sellers. Prashanth Tapse, senior vice-president (research), at Mehta Equities Ltd said, “Nervousness continued to grip investors as stocks across the board went into a tailspin. The dollar’s continuing strength against the rupee has been prompting foreign investors to flee local equities and take shelter in safe haven dollar assets. Investors are also apprehensive about Trump’s trade policies when he takes charge in mid January next year, as his aggressive policies could further roil global markets.” This week the Fed cut its policy rate by 25 basis points as widely expected bringing down the Fed Funds rate to 4.25-4.50 per cent but projected only two more rate cuts of a quarter-percentage point by the end of 2025 as against the market's expectations of three or four rate cuts. The revised projections indicate that by the end of 2025, Fed Funds rate could fall to 3.75 per cent to 4 per cent.
Mumbai: The Indian stock market witnessed a sharp decline on Friday with the BSE Sensex plummeting 1,176 points or 1.49 per cent to close at 78,041.59 while the NSE Nifty dropped 364.20 points or 1.52 per cent to end at 23,587.5 as market sentiment remained cautious after the US Federal Reserve projected fewer rate cuts next year prompting foreign investors to flee local equities and take shelter in safe-haven dollar assets. The market capitalization of all listed companies on the BSE decreased by Rs 10.15 lakh crore to Rs 440.99 lakh crore. Indian investors have lost a massive Rs 18.43 lakh crore during the five days ending December 20, 2024, according to BSE data.
The week’s last trading session ended in favour of the bears, with 45 out of the constituent stocks of the Nifty50 ending in red. The worst performers were Tech Mahindra, IndusInd Bank, Mahindra and Mahindra, Axis Bank and Trent with losses of about 3.90 per cent. Stocks namely Dr Reddy’s Lab, Titan, Nestle India, HDFC Life Insurance and ICICI Bank managed to close in green with gains of up to 1.49 per cent. The Nifty50 finished the week below 200 simple moving average marking a total loss of nearly 5 percent.
Foreign institutional investors (FIIs) have sold Rs 12,230 crore worth of Indian equities over the past four sessions. December has now seen FIIs turning net sellers.
Prashanth Tapse, senior vice-president (research), at Mehta Equities Ltd said, “Nervousness continued to grip investors as stocks across the board went into a tailspin. The dollar’s continuing strength against the rupee has been prompting foreign investors to flee local equities and take shelter in safe haven dollar assets. Investors are also apprehensive about Trump’s trade policies when he takes charge in mid January next year, as his aggressive policies could further roil global markets.”
This week the Fed cut its policy rate by 25 basis points as widely expected bringing down the Fed Funds rate to 4.25-4.50 per cent but projected only two more rate cuts of a quarter-percentage point by the end of 2025 as against the market's expectations of three or four rate cuts. The revised projections indicate that by the end of 2025, Fed Funds rate could fall to 3.75 per cent to 4 per cent.
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