Markets extend decline ahead of TCS Q3 results, Sensex down 500 pts, Nifty below 23,550; FMCG shines

Laggards on the Nifty included ONGC, Shriram Finance, BPCL, Coal India and Tata Steel.

Benchmark indices Nifty and Sensex ended the session firmly in the negative on January 9 as 12 out of 13 indices plunged into the red. Bucking the trend was the FMCG index, up sharply after brokerage firm CLSA made consumer staples its biggest anti-consensus call for 2025.

Investors will keenly watch TCS Q3 results later today as expectations suggest that revenue for the IT giant is widely expected to remain muted due to higher furloughs in Q3. However, a depreciation of the Indian rupee could aid margins.

At close, the Sensex was down 528.28 points or 0.68 percent at 77,620.21, and the Nifty was down 162.45 points or 0.69 percent at 23,526.50. About 1,175 shares advanced, 2,610 shares declined, and 109 shares unchanged.

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"The banking sector, previously driving market recovery post-November lows, has now underperformed, impacting overall market sentiment. The decline in banking, combined with continuous foreign fund outflows, is pushing markets lower. The upcoming earnings season could bring a turnaround if positive surprises emerge; otherwise, the negative trend may persist," Ajit Mishra, Senior Vice President of Religare Broking said in an interaction with Moneycontrol.

He added that for 2025, the first half is seen as critical. Following nine consecutive years of index growth, expectations for returns are moderate, with a shift towards the sector and theme-specific moves, making it a stock-picker's market.

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The broader market, comprising mid-small cap indices, reflected the overall mood with losses of 0.9 and 1.3 percent, respectively. A host of experts that Moneycontrol has spoken to suggest that the focus remains on earnings, which will dictate the trajectory moving forward. The performance remains stock specific which some spaces offering reasonable valuations.

Barring the FMCG index, all sectors ended lower. Nifty Realty was the biggest loser with losses of nearly 3 percent. Majors like DLF, Godrej Properties, Lodha and Oberoi Realty dragged the index. Nifty Energy closely followed, falling over 2 percent led by ONGC, Coal India, GAIL, and Suzlon Energies. The Nifty PSU Bank index also fell over a percent after a couple of Q3 business updates left investors unimpressed. Nifty Metal and Infra also slid a percent each.

Nifty FMCG stocks stood out in the afternoon with gains of almost 1 percent, attracting robust investor interest. This comes as brokerage firm CLSA made consumer staples its biggest anti-consensus call for 2025. After avoiding the sector in its India portfolio for four years, CLSA has now turned "overweight" on consumer staples, making it the largest allocation in its India portfolio.

Read more: Swiggy to launch Instamart as separate app, eyes multi-app strategy on quick commerce boom

TCS shares slid nearly 2 percent ahead of the IT giant's Q3 (October-December) earnings results, which are scheduled to be released later today. According to a Moneycontrol poll of seven brokerages, TCS is likely to post a less than one percent sequential decline in revenue to Rs 64,218 crore, down from the Rs 64,259 crore that it clocked in the last quarter.

Two-wheeler major Bajaj Auto rose as much as 2 percent after brokerage firm CLSA upgraded it to an 'outperform' call from the previous 'underperform' rating. The upgrade stemmed from the recent correction in the stock combined with growth prospects of Bajaj Auto's electric two-wheeler business.

Kalyan Jewellers' share price fell over 4 percent to extend losses for a fifth consecutive session. Earlier, the company released its Q3 FY25 updates, highlighting the likeliness of its net revenue to grow by 39 percent with India business surge standing at 41 percent on festive and wedding demand. The quarter also witnessed growth in same-store sales, close to 24 percent.

"Nifty can find support at 23,600 followed by 23,500 and 23,400. On the higher side, 23,800 can be immediate resistance, followed by 23,900 and 24,000," Hardik Matalia, Derivative Analyst at Choice Broking, said. "The charts of Bank Nifty indicate that it may get support at 49,400 followed by 48,900 and 48,500. If the index advances further, 50,000 would be the initial key resistance, followed by 50,300 and 50,500," he added.

Bajaj Auto, M&M, Nestle, HUL and Britannia Industries were the major gainers on the Nifty. Laggards on the Nifty included ONGC, Shriram Finance, BPCL, Coal India and Tata Steel.

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