Sensex and Nifty continued to face selling pressure on December 17 afternoon, as financials, IT, and oil & gas sectors weighed on the indices. The decline in the benchmarks came amid weak FII volumes due to the holiday season and heightened caution ahead of the U.S. Federal Reserve's monetary policy meeting, which is expected to provide critical cues on the trajectory of interest rate cuts.
The India VIX, a key measure of market volatility, extended gains from the previous session, surging 6.5 percent to touch nearly 15 points—a signal of rising unease among investors.
At 14:20 hours, the Sensex was down 1,033.83 points or 1.26 percent at 80,714.74, and the Nifty was down 326.40 points or 1.32 percent at 24,341.85. About 1,362 shares advanced, 2,157 shares declined, and 67 shares unchanged.. HDFC Bank, RIL, Bharti Airtel, ICICI Bank, and TCS contributed over 140 points to Nifty's decline.
"The markets are now witnessing some profit booking ahead of the holiday season, leading to consolidation," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities. "The market seems to be in a 'wait and watch' mode, especially with the upcoming Fed decision. Globally, markets are also largely in a consolidation phase, which is contributing to short-term pressure."
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Except media and realty, rest of the sectors on Nifty were trading in red.
Investors now look forward to the Fed's December 18 decision, where a 25-basis-point rate cut is almost certain, with odds at 97 percent, as per the CME FedWatch tool. Following the FOMC meet, the Q3 FY25 earnings season in January and Union Budget in February will act as the next big triggers for the Indian market.
The Nifty Bank, Nifty Private Bank, and Nifty PSU Bank indices fell over 1 percent each, weighed down by heavyweights HDFC Bank, ICICI Bank, and Axis Bank, which dragged the financial sector lower.
HDFC Bank shares dropped over 1 percent after receiving a warning letter from India's market regulator, SEBI, alleging that its disclosures related to the resignation of a senior employee were non-compliant with certain regulations.
The Nifty IT index slipped 0.7 percent, weighed down by losses in TCS, Infosys, and LTIMindtree, which declined 0.5-2 percent.
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Defying the broader market weakness, the Nifty Media index extended its winning streak for the second straight session, rising 0.4 percent, driven by gains in PVR Inox, Saregama, and Nazara Technologies. Multiplex operators such as PVR Inox are banking on the much-anticipated release of Allu Arjun's Pushpa 2 to boost footfalls and lift their fortunes in the October-December quarter.
Bathini said that traders need to observe if the index can hold the key support level of 24,250. "Today's fall of Nifty was largely unwarranted. We will have to see if any follow-on buying emerges in the next hour to gauge the trend," he said.
"While the selling pressure persists, the strong support zone around 24,250 could stabilise the market, and selective buying opportunities may emerge," Bathini added.
Shriram Finance, Bharti Airtel, Grasim, L&T, and Bajaj Finserv were the top losers on the Nifty 50, sliding 2-4 percent each. On the flip side, Cipla, ITC, Adani Ports, Apollo Hospitals, and Tata Motors emerged as the top gainers, rising 0.4-1.4 percent.
Cipla gained 0.8 percent and emerged as the top gainer on Nifty 50 after Kotak Institutional Equities upgraded the stock to 'Buy' from 'Add'. The upgrade was driven by factors such as reasonable valuations, a series of upcoming US launches, expectations of domestic recovery, and healthy growth in South Korea.
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