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Indices end lower on second consecutive session
Jan-06-2025

Indian equity benchmarks faced intense selling pressure and ended lower on the second consecutive session on Monday due to an across-the-board selloff. The decline also came after three cases of Human Metapneumovirus (HMPV) were detected in the country. Markets opened mildly in the green however witnessed follow through selling pressure as a cautious undertone prevailed after foreign portfolio investors continued their selling spree and investors wait for cues from the Q3 earnings season, beginning with TCS this week. Foreign institutional investors (FIIs) offloaded Rs 4,227.25 crore in the capital markets on a net basis on Friday, according to exchange data. Traders were concerned after India’s foreign exchange reserves continue to decline, extending downhill journey for three months now. Data from the Reserve Bank of India (RBI) showed, in the week that ended December 27, the country’s foreign exchange kitty declined by $4.112 billion to $640.279 billion. 

The selling pressure intensified during the second half of the session amid a private report stated that India's current account deficit (CAD) is expected to remain elevated in FY26 due to stringent global trade policies. The report highlighted that the country's imports have consistently outpaced exports, leading to a widening trade deficit. The risk of a further deterioration in India's trade balance due to sluggish exports, which will keep the country's current account deficit (CAD) elevated. Traders paid no heed towards report that India’s services sector witnessed a faster growth in the month of December, as demand buoyancy continued to drive new business inflows higher, which in turn supported output growth and prompted firms to recruit additional workers. According to the survey report, the seasonally adjusted HSBC India Services PMI Business Activity Index surged to 59.3 in December from 58.4 in November. 

On the global front, European markets were trading mostly in green as S&P Global said that the Euro Area's Composite PMI increased to 49.60 points in December from 48.30 points in November of 2024. The data said Services PMI in the Euro Area increased to 51.60 points in December from 49.50 points a month earlier. Asian markets settled mostly down on Monday as traders looked ahead to some crucial economic data, including monthly jobs report, from the U.S.  

Finally, the BSE Sensex fell 1258.12 points or 1.59% to 77,964.99, and the CNX Nifty was down by 388.70 points or 1.62% to 23,616.05.             

The BSE Sensex touched high and low of 79,532.67 and 77,781.62 respectively. There were 3 stocks advancing against 27 stocks declining on the index.  

The broader indices ended in red; the BSE Mid cap index fell 2.44%, while Small cap index was down by 3.17%.

The top losing sectoral indices on the BSE were Utilities down by 4.16%, Power down by 3.73%, PSU down by 3.56%, Oil & Gas down by 3.15% and Metal down by 3.15%, while there were no gaining sectoral indices on the BSE. 

The few gainers on the Sensex were Titan Company up by 0.60%, HCL Technologies up by 0.26% and Sun Pharma up by 0.01%. On the flip side, ITC down by 8.20%, Tata Steel down by 4.41%, NTPC down by 3.65%, Kotak Mahindra Bank down by 3.26% and Power Grid Corporation down by 3.19% were the top losers.

Meanwhile, Commerce and Industry Minister Piyush Goyal has said that foreign direct investment (FDI) inflows into the country are surging, with investors from the Middle East, Japan, European Union, and the US recognising India's status as a top investment destination, driving rapid economic growth and generating millions of new jobs. 

Goyal said that global investors are showing keen interest in India as the country offers several advantages such as strong domestic market, skilled and talented workforce and rule of law. He added that India's stable and predictable regulatory framework, coupled with a favourable business environment and progressive policies aimed at enhancing ease of doing business, is attracting an increasing number of investors from around the world.

Further, he noted ‘Last month I met a CEO of one of the largest funds in the US, who is also the largest investor in India, and he shared with me that his investments in India over the last 10 years have been some of the best investments his funds have ever done.’ The US fund, Goyal said, informed him that they are investors in India for the last 20 years, but more than 80 per cent of their investments happened in the last few years.

In the January-September period this year, FDI into the country rose by about 42 per cent to $42.13 billion. The inflow was at $29.73 billion in the year-ago period. The inflows during April-Sept 2024-25 grew by 45 per cent to $29.79 billion against $20.48 billion in the same period previous fiscal. Total FDI in 2023-24 was a healthy $71.28 billion.

The CNX Nifty traded in a range of 24,089.95 and 23,551.90. There were 7 stocks advancing against 43 stocks declining on the index. 

The top gainers on Nifty were Apollo Hospital up by 1.94%, Tata Consumer Products up by 1.12%, Titan Company up by 0.72% and HCL Technologies up by 0.10%. On the flip side, Tata Steel down by 4.60%, Trent down by 4.35%, BPCL down by 3.68%, NTPC down by 3.63% and Adani Enterprises down by 3.61% were the top losers.

European markets were trading mostly in green; France’s CAC rose 41.64 points or 0.57% to 7,323.86 and Germany’s DAX gained 83.14 points or 0.42% to 19,989.22, while UK’s FTSE 100 decreased 12.41 points or 0.15% to 8,211.57.

Asian markets settled mostly down on Monday ahead of the release of minutes from the US Fed's last meeting due on Wednesday and the US December payrolls report due on Friday, with Japanese markets led declines due to profit taking after the Nikkei index's year-end rally. Chinese and Hong Kong shares dropped, even after a private sector survey showed China's service activity expanded at a faster clip at the end of 2024. While the Chinese onshore yuan breached a key milestone for the first time since late 2023 amid reports that the PBoC will issue the largest-ever offshore yuan bonds in Hong Kong this month. However, Seoul shares gained after a court dismissed an appeal by lawyers of Yoon Suk Yeol against an arrest warrant for the impeached president.

Asian Indices

Last Trade            

Change in Points

Change in %      

Shanghai Composite

3,206.92

-4.51

-0.14

Hang Seng

19,688.29

-71.98

-0.37

Jakarta Composite

7,080.47

-83.96

-1.19

KLSE Composite

1,625.47

-3.99

-0.24

Nikkei 225

39,307.05

-587.49

-1.49

Straits Times

3,821.84

20.01

0.52

KOSPI Composite

2,488.64

46.72

1.88

Taiwan Weighted

23,547.71

639.41

2.72
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