The equity market saw a sharp decline on Friday, snapping a three-day rally, as the Sensex and Nifty fell under pressure from persistent foreign fund outflows, mixed third-quarter earnings, and global uncertainty ahead of Donald Trump’s swearing-in as the 47th President of the United States.
Key IT and banking stocks dragged the benchmarks lower, despite gains in select heavyweights like Reliance Industries and ITC.
The BSE Sensex plunged 779.53 points, or 1 percent, to 76,263.29, while the NSE Nifty slipped 211.45 points, or 0.90 percent, at 23,100.35.
Key Factors Behind the Decline
1) Foreign Institutional Investors’ (FII) Selling Pressure: FIIs continued their selling spree, offloading equities worth Rs 4,341.95 crore on Thursday. Analysts noted that persistent outflows have dampened investor sentiment, exerting downward pressure on the market.
2) Mixed Q3 Earnings: Shares of Infosys plummeted 6 percent following a similar drop in its American Depository Receipts (ADRs) listed on the NYSE. While the IT major posted better-than-expected October-December earnings, its revised revenue growth guidance pointing to a weaker Q4 raised concerns. Axis Bank also faced selling pressure after brokerages downgraded their price targets post its December quarter results.
"The combination of FII selling and lacklustre earnings is hitting market sentiment hard,” said Ajit Mishra, SVP of Research at Religare Broking Ltd. "Pressure on IT and banking heavyweights is dragging the indices, although some support is coming from stocks like Reliance, ITC, and L&T."
3) Global Uncertainty Ahead of Trump’s Swearing-In: Investors remained cautious ahead of Donald Trump’s swearing-in on Monday. Markets are wary of the potential impact of his proposed trade policies, including new tariffs, on global trade and economic stability.
4) Technical Weakness: Anand James, Chief Market Strategist at Geojit Financial Services, noted that technical resistance around the 23,370 mark has held firm. “While a pullback to 23,290 is possible, a direct fall below 23,250 could halt the recovery swing and expose the Nifty to lower levels of 23,000–22,800,” he said.
Reliance Industries provided some respite, rising over 2.5 percent after posting a 7.4 percent increase in December quarter net profit. The company’s strong performance was driven by a rebound in its retail business, higher telecom earnings from increased tariffs, and steady results in its oil and petrochemicals segment.
Other notable gainers included Tata Motors, Larsen & Toubro, Nestle, and Asian Paints, which managed to cap some of the broader market losses.
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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