The Indian equity markets have been facing a downturn for the past few sessions, with foreign institutional investors (FIIs) continuing to sell off their holdings. This trend is being driven by a stronger dollar and rising US bond yields. The BSE Sensex and NSE Nifty both opened lower on Thursday, with the Sensex falling 0.33% to 77,888.89 and the Nifty declining 0.35% to 23,605.25.
FIIs sold equities worth ₹3,362 crore on January 8, while domestic institutional investors bought shares worth ₹2,716.28 crore. This selling pressure from FIIs is expected to continue in the near term, as the dollar index stands at 109 and the 10-year bond yield is at 4.67%. The upcoming results of TCS are also anticipated to give an indication of what to expect for the IT sector.
In terms of sectoral movements, oil and gas stocks showed strength, while healthcare and pharmaceutical counters witnessed profit booking. The India VIX, a measure of market volatility, was down 1.33% at 14.4650.
On the stock front, Kotak Bank emerged as the top gainer in early trade, followed by Hindalco, Bajaj Auto, Infosys, and M&M. Apollo Hospitals led the losers, followed by Trent, UltraTech Cement, L&T, and Grasim.
The economic projections for India’s GDP growth to slow to 6.4% in FY25, below the RBI’s estimate of 6.6%, have added to market concerns. Additionally, a revision in November’s gold import data has raised questions about data accuracy and eroded trust among foreign investors.
In commodities, crude oil futures traded lower due to an increase in product stockpiles in the US. Gold and silver prices also retreated from their intraday highs, driven by dollar strength and elevated US bond yields.
Technical analysts have identified key support levels for the market, with a focus on staying above 23,500. Looking ahead, market participants are anticipating the upcoming quarterly results season, budget announcements, and the RBI’s MPC meeting, all of which could add to market volatility. Premium segments such as hotels, jewellery, automobiles, and airlines are expected to report strong numbers for the quarter.
Overall, the market outlook remains uncertain, with a continued focus on external factors impacting investor sentiment and market movements.
