Share market fell sharply in late afternoon trade on Monday, with BSE Sensex closing about 850 points down from the day’s high and NSE Nifty ending below the 23,650 mark, as foreign institutional investor (FII) outflows, global cues, and a weakening rupee weighed on investor sentiment.
At close of the trade on December 30, the Sensex was down 450 points or 0.6 percent from the previous close, at 78,248. The Nifty dropped 168 points or 0.7 percent to 23,645. Both indices slipped over 1 percent from their intraday highs. Market breadth remained weak, reflecting broad-based selling pressure.
Pharma bucks the bearish trend
Most NSE sectoral indices ended in red. However, the Nifty Pharma index was the top sectoral gainer, up 1 percent. Consumer Durable, FMCG and IT index ended mildly positive. The Nifty Auto index led the losses, down 1.4 percent. Among other major losers were the Nifty Bank index (down 0.7 percent) -- which had led the intraday recovery earlier; energy, infrastructure and metals indices fell 0.5-1.5 percent each.
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Pharma stocks provided a bright spot, with Sun Pharma and Cipla gaining 1.2 percent and 1 percent, respectively. Volatility rose during the session, with the India VIX closing up 5.5 percent at 13.97.
Adani Enterprises remained the top gainer on the Nifty, surging 7.5 percent to Rs 2,592. Other gainers included IT firms HCL Tech and Tech Mahindra, up 2 percent and 1.7 percent, respectively. Among the losers, Hindalco fell 2.6 percent, followed by Bharat Electronics, Trent and Tata Motors, which dropped up to 2.5 percent each.
Global cues and rupee impact
The persistent outflow of foreign institutional investors continues to be a major drag on Indian equities. The ongoing depreciation of the rupee, which is now nearing the 86-per-dollar mark, has made Indian shares less attractive to foreign investors due to reduced returns in dollar terms. "The rupee’s depreciation is making Indian equities less appealing to FIIs, who face diminishing returns in dollar terms," said Mandar Bhojane, research analyst at Choice Broking.
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Indian markets also mirrored weakness in global equities, with most Asian indices trading lower following Friday’s losses on Wall Street. The S&P 500 and Nasdaq 100 declined over 1 percent as U.S. investors trimmed positions ahead of the year-end amid uncertainty about the 2025 international trade landscape. Bhojane said that the lack of domestic triggers, alongside global uncertainties and diminished expectations of U.S. rate cuts in 2025, is keeping markets under pressure.
Technical outlook
"Momentum is expected to be low, which restrains us from chasing upsides today, despite maintaining 24,165 as the near-term target," said Anand James, Chief Market Strategist at Geojit Financial Services. He noted that the Nifty’s downside support remains at 23,750, with a breach below 23,600 signalling further weakness.
As the penultimate trading session of 2024 unfolds, market volatility and global factors are likely to dominate sentiment. Analysts expect the markets to remain under pressure, with upcoming data such as monthly auto sales and December quarter earnings providing the next directional cues.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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