Freaky Friday at D-Street: Sensex crashes 1,000 pts, Nifty below 24,250; metal stocks drag

The Nifty Metal index emerged as the worst performer, sliding 2.4 percent. Steelmakers, including JSW Steel, Tata Steel, NMDC, and SAIL, bore the brunt, dropping 3-5 percent.

Sensex and Nifty saw losses in opening trade on December 13, dragged down by broad-based selling across sectors as global market jitters weighed on sentiment. The weakness follows the lead of other Asian markets, which posted steep losses this morning due to a combination of factors, including a stronger dollar, rising U.S. Treasury yields, and disappointment in the Chinese economy.

Metal stocks which were weighed down by uncertainty over China's stimulus plans, were the biggest losers in trade declining over 2 percent, although all 13 major sectors fell.

At 10:30 AM, the Sensex was down 1,023 points or 1.3 percent at 80,266, and the Nifty was down 311 points or 1.3 percent at 24,237. About 740 shares advanced, 2,493 shares declined, and 93 shares remained unchanged. The market sell-off erased Rs 6.8 lakh crore from the total market capitalisation.

"The rising dollar is a concern since it can lead to imported inflation," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Risk aversion was seen across all Asian markets. China's Shanghai Composite, Japan's Nikkei 225, and Hong Kong's Hang Seng index fell 1-2 percent each.

Rising treasury yields, which have seen their biggest weekly rise this year are dashing hopes of deep U.S. rate cuts in 2025. Besides, a high-level meeting in Beijing that pledged to boost debt and consumption failed to lift Chinese stocks as concerns over renewed U.S. trade tensions grow with Donald Trump's potential return to power.

The Wall Street ended lower on December 12 as investors parsed key economic data ahead of the Federal Reserve's policy meeting next week. A Labor Department report revealed that U.S. producer prices rose more than expected in November, though softer service costs signalled a continuation of the broader disinflation trend. An unexpected rise in initial unemployment claims also raised concerns about labour market stability.

As for India, concerns around continued foreign selling persist. Vijayakumar highlighted renewed selling by Foreign Institutional Investors (FIIs) as a key challenge for the market. Over December 11 and 12, FIIs offloaded Indian equities worth Rs 4,572 crore. "Given the high valuations in India FIIs are likely to sell more at every market rise. Selling has been profitable for FIIs since the dollar has been appreciating after the US election," he said.

Follow our live blog for all the market action

The much-awaited India Consumer Price Index (CPI)-based inflation eased to 5.48 percent in November, compared to 6.21 percent in October, according to data released by the Ministry of Statistics and Programme Implementation. Food and beverage inflation softened to 8.2 percent in November from 9.69 percent the previous month, primarily due to vegetable prices cooling to 29.33 percent from 42.18 percent.

"These numbers (India CPI) are unlikely to have any major impact on the market—it will likely just consolidate," said Gaurang Shah, Senior Vice President of Geojit Financial Services. "We are currently in a consolidation zone, with the Nifty expected to range between 24,200–24,400 on the lower side and 24,600–24,750 on the higher side. While the markets remain within this range, we can expect stock-specific and sector-specific movements, as seen throughout this and the previous week."

"Just few days back, the index was at 23,300, so this recovery to current levels warrants some consolidation time," Shah noted, adding that he expects this phase to last through the remainder of the year. "However, if Nifty closes decisively above 24,750–24,800, we could see a rally toward 25,000, though that will take some time."

The Nifty Metal index emerged as the worst performer, sliding 2.4 percent. Steelmakers, including JSW Steel, Tata Steel, NMDC, and SAIL, bore the brunt, dropping 3-5 percent. Notably, JSW Steel, Tata Steel, and Hindalco were among the top laggards on the Nifty 50 index.

The Nifty PSU Bank index tumbled 2.7 percent, weighed down by SBI, Bank of Baroda, and Canara Bank.

Broader markets faced intense selling pressure as well, with the BSE Midcap and Smallcap indices slipping 1.5 percent and 1.8 percent, respectively.

Meanwhile, the Indian VIX, a gauge of market volatility, spiked nearly 9 percent to reach 14.3, signaling heightened investor caution.

On the Nifty 50 index, Bharti Airtel and Apollo Hospitals were the only gainers, rising 0.2 percent and 1.2 percent, respectively. In contrast, Shriram Finance, Tata Steel, JSW Steel, Hindalco, and IndusInd Bank led the losers' pack, slipping 2-4 percent each.

IndusInd Bank dropped nearly 3 percent after UBS cut its target price to Rs 1,150 from Rs 1,350 per share and reduced its EPS estimates by 5-6 percent for FY25-26, maintaining a 'Neutral' rating. Axis Bank shares also fell 2.6 percent after UBS revised its target price downward to Rs 1,210 from Rs 1,250 per share.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.