Bears grip D-Street! Sensex plunges over 600 pts, Nifty below 24,050 as IT, bank stocks fall

Hero MotoCorp, Cipla, Dr Reddy's, TCS, and Kotak Mahindra Bank were the major laggards.

Benchmark indices Nifty and Sensex started on a subdued note on January 3, ending the two-day winning streak weighed down by weakness in IT and private bank stocks. The decline followed a strong rally in the previous session, where leading indices posted their best gains in six weeks. The pullback also comes amid weak global cues, with major US stock indices finishing lower, reversing earlier gains.

At 10:35 am, the Sensex was down 631.26 points or 0.79 percent at 79,312.45, and the Nifty was down 173.10 points or 0.72 percent at 24,015.55. About 1,948 shares advanced, 1,282 shares declined, and 105 shares were unchanged.

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"The Indian markets could see a decent rebound given that the Nifty moved above its 200-day moving average," Kranthi Bathini, Director of Equity Strategy at WealthMills Securities said in a conversation with Moneycontrol. The sustainability of FII buying will be crucial in the coming week. Looking ahead, the Q3 earnings season is expected to guide market sentiment, with a focus on management commentary and forward-looking estimates. Bathini anticipates Q3 to outperform Q2, driven by potential surprises in consumption, infrastructure, and IT sector.

The small and midcap indices showed volatility. While the midcap index traded marginally lower, the smallcap index traded 0.5 percent in the green. "While mid-caps and small-caps as indices may appear richly valued compared to their historical averages, there are still excellent stock-specific opportunities within this space. It’s a time to focus on individual ideas rather than looking at the broader index," Narendra Solanki, Head of Fundamental Research at Anand Rathi Shares and Stock Brokers said in a conversation with Moneycontrol.

In the morning trade, Nifty IT and Pharma traded in the negative, falling 1 percent each. This comes after the two rallied 2 and 1 percent respectively during the last session. Nifty Bank fell 1 percent as heavyweights like HDFC Bank, ICICI Bank, and Axis Bank dragged the index lower. Auto stocks slipped into the red, snapping their two-day gaining streak hot on the heels of better-than-expected December sales data. Nifty Realty also fell almost 1 percent as profit-taking intensified.

Among gainers Nifty PSU Bank index shone the brightest, rising over a percent led by gains in SBI, Union Bank and Bank of Baroda. Nifty Metal, Consumer Durables, Oil and Gas rose 0.5 percent each.

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Among individual stocks, the world's largest two-wheeler company Hero MotoCorp shares fell over 2 percent after it reported total sales of 3,24,906 units, a decline of 17.5 percent compared to the same month last year. It reported a 7.5 percent rise in total sales for 2024, with volumes reaching 59,11,065 units, up from 54,99,524 units in 2023.

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Shares of Avenue Supermarts, the parent company of DMart, surged 10 percent on Friday, January 3, hitting the upper circuit. The rally came after the company reported a robust 17.5 percent growth in third-quarter sales, marking its strongest performance in several quarters.

Wockhardt shares rallied 6 percent after the Indian drug regulator, the Central Drugs Standard Control Organization (CDSCO), approved the new-generation oral antibiotic Miqnaf (nafithromycin). Miqnaf is used in the treatment of community-acquired bacterial pneumonia (CABP) in adults.

Shares of Bank of Maharashtra rose 4 percent after the lender reported strong provisional numbers for the third quarter. The bank's total business grew nearly 17 percent year-on-year, driven by a robust 21 percent rise in gross advances. Deposits also saw healthy growth, increasing by over 13 percent. However, the CASA ratio dipped slightly from the previous year, reflecting a marginal shift in deposit composition.

"Nifty can find support at 24,000 followed by 23,900 and 23,800. On the higher side, 24,250 can be immediate resistance, followed by 24,350 and 24,500," Hardik Matalia, Derivative Analyst at Choice Broking, said. "The charts of Bank Nifty indicate that it may get support at 51,300 followed by 51,000 and 50,800. If the index advances further, 51,800 would be the initial key resistance, followed by 52,000 and 52,200," he added.

Titan Company, ONGC, Tata Motors, Maruti Suzuki, and IndusInd Bank were the top gainers on the Nifty. Hero MotoCorp, Tech Mahindra, HDFC Bank, ICICI Bank, and Wipro were the major laggards.

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