Sensex tumbles 300 pts from day's high, Nifty below 23,250 ahead of US CPI data; pharma, auto stocks fall

Trent, NTPC, Power Grid Corp, Kotak Mahindra Bank, and Coal India were the major Nifty gainers.

Benchmark indices Nifty and Sensex struggled to hold onto early gains on January 15, with auto and pharma stocks dragging the market lower. A rally in IT, energy, and infra stocks offered some support, helping the indices stay marginally in the green by afternoon. However, the start to 2025 remains subdued, with both indices down 2 percent year-to-date.

Investors await the US consumer price inflation report that could provide more clarity on the Federal Reserve's interest rate trajectory. The December data, due at 7 pm IST, will be closely watched by market participants after last week's blowout jobs report underlined the strength of the U.S. economy and led traders to heavily pare back bets of further Fed easing.

At close, the Sensex was up 224.45 points or 0.29 percent at 76,724.08, and the Nifty was up 37.15 points or 0.16 percent at 23,213.20. About 2,057 shares advanced, 1,733 shares declined, and 104 shares unchanged.

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"The market remains weak despite being in oversold territory, with recent gains being technical pullbacks rather than a change in fundamentals," Rajesh Palviya, Head of Technical Research at Axis Securities said in an interaction with Moneycontrol. "The broader market structure suggests a "sell-on-rise" strategy, given the ongoing uncertainties around Q3 earnings, the Union Budget, and global factors like U.S. trade policies under President Trump," he added.

Palviya also noted that Q3 earnings would be subdued, weaker than the previous quarter, adding to the bearish sentiment. On Foreign Institutional Investor (FII) selling, he observes a trend of continued outflows as FIIs focus on generating liquidity, despite sharp corrections in large-cap and PSU stocks. He anticipates that this selling will persist until uncertainties settle, potentially leading to further market corrections.

The NSE Midcap and Smallcap 100 indices, up over 1 percent each in the morning, erased partial gains to trade higher by just 0.4 and 0.5 percent, respectively. Regarding the mid-and small-cap space, Palviya highlights persistent underperformance due to weak market sentiment and quality concerns in balance sheets. Institutional fund buying is limited, and retail and HNI investors are under pressure, leading to a lack of buyers and further declines.

Also read: Merchandise trade gap widens to $21.94 bn in December

Among sectoral indices, Nifty IT, Energy, Realty, and Infra led the charge, advancing up to 1.1 percent. The IT index staged a recovery, snapping a two-day losing streak as investors moved past HCL Tech’s underwhelming Q3 results from the previous session.

In contrast, Nifty Pharma, Auto, and FMCG stocks faced pressure, declining by as much as 1.2 percent. The FMCG index extended its lacklustre start to the week, slipping 0.3 percent—a fourth consecutive day of losses for the sector. Industry heavyweight HUL bore the brunt of the decline, followed by Nestle India and Varun Beverages, further weighing on sentiment.

Power stocks surged on January 15, with Power Grid, NTPC, and Coal India leading the Nifty 50 gainers, rising as much as 4 percent. The rally followed data from the Ministry of New and Renewable Energy, which revealed that India achieved a record high in renewable energy generation in 2024. Other power companies that joined the upward momentum included Adani Green Energy, NHPC, Tata Power, Adani Power, JSW Energy, Torrent Power, SJVN, and CESC, all seeing gains between 1 and 3 percent.

Read more: MC Explains | How are stocks chosen to join the Nifty 50 index?

Shares of Persistent Systems rose 4 percent after the company launched ContractAssIst, an AI-powered contract management solution developed in partnership with Microsoft. ContractAssIst will leverage Microsoft's technology ecosystem to offer contract management features. Built on Azure AI, the solution ensures data handling, search capabilities, and compliance.

Premier Energies shares gained 3 percent in early trade after the company announced that its three subsidiaries have received multiple orders worth Rs 1,460 crore for the supply of solar PV cells and modules. The subsidiaries, namely Premier Energies Global Environment, Premier Energies International and Premier Energies Photovoltaic, have received orders from two large independent power producers and others.

"Though a "sell on rallies" mode appeared to dominate most of yesterday, the consolidation near our pivot of 23,176 is suggestive that a recovery swing is indeed taking shape. While 23,550-640 objectives appear possible with such an upswing, we prefer to continue eying 23,370 as the level to beat, as maintained yesterday, to confirm strength," Anand James, Chief Market Strategist at Geojit Financial Services, said.

Trent, NTPC, Power Grid Corp, Kotak Mahindra Bank, and Maruti Suzuki were the major Nifty gainers. M&M, Axis Bank, Bajaj Finance, Bajaj Finserv, and Shriram Finance were the major laggards on the Nifty.