The stock market experienced a decline on Friday, with the BSE Sensex falling by 720.60 points and the Nifty 50 dropping by 183.90 points. This reversal in gains was attributed to selling pressure in IT and banking stocks, driven by concerns over global trade policies and domestic valuations. Additionally, the Bank Nifty witnessed a significant decline of 616.75 points.
The Indian Rupee also depreciated, closing at a record low of 85.79 against the U.S. dollar on the same day. This was influenced by strong dollar demand from importers and a lackluster trend in domestic equities.
Market experts highlighted that despite a brief recovery in the past two sessions, there is still a sense of pessimism due to factors such as slowing growth, high domestic valuations, foreign fund outflows, and uncertainty surrounding US trade policies under the new presidential administration.
Market breadth remained slightly positive, with more shares advancing than declining. Foreign institutional investors (FIIs/FPIs) recorded a net inflow of ₹1,506.75 crore, while domestic institutional investors (DIIs) saw a marginal net inflow of ₹22.14 crore. Market participants are eagerly awaiting the First Advance Estimates of Annual GDP for FY 2024-25, scheduled for release on January 7, 2025, which could impact market sentiment leading up to the Union Budget.
Despite the recent pullback, experts believe it to be a normal correction following a period of recovery. Sectoral performance was mixed, with gains in the media and energy sectors, while IT and pharma sectors experienced declines.
Looking ahead, it will be crucial to monitor market volatility, sectoral performance, and key economic indicators to gauge the overall market sentiment and potential investment opportunities.
