Key Market Movements

Sensex: Opened at 76,629.90, down from the previous close of 77,378.91. It hit an intraday low of 76,249.72 before closing 1,049 points lower at 76,330.01 (-1.36%).

Nifty 50: Opened at 23,195.40 compared to the previous close of 23,431.50. It dropped 384 points to an intraday low of 23,047.25 and ended the day at 23,085.95 (-1.47%).

Market Capitalisation: The total market capitalisation of BSE-listed companies fell to ₹417 lakh crore, losing ₹13 lakh crore in a single day. Over the past four sessions, investors have lost ₹25 lakh crore in total.

Reasons Behind the Fall

1. Rising Crude Oil Prices

Crude oil prices surged to a three-month high due to supply constraints driven by sanctions. This spike has put additional pressure on India’s fiscal health as a major oil importer, increasing inflation concerns and weighing on market sentiment.

2. Rupee Depreciation

The Indian rupee fell to a historic low of ₹86.59 against the US dollar, exacerbated by rising crude oil prices and a strong US dollar (Dollar Index at 109.72). This further weakened foreign investment flows into the Indian markets.

3. Aggressive FPI Selling

Foreign Portfolio Investors (FPIs) continued their selling streak, offloading ₹21,350 crore worth of equities in January (till January 10). This follows heavy selling of ₹16,982 crore in December 2024, marking cumulative outflows of ₹1,76,419 crore since October 2024.

4. Union Budget Concerns

Investors are cautious ahead of the Union Budget 2025, with fears of fiscal prudence being offset by possible populist measures. This uncertainty has added to market volatility.

5. Global Trade Policy Uncertainty

Speculations around protectionist policies and higher tariffs have raised concerns about global trade, pressuring export-driven sectors in India.

6. Muted Q3 Earnings Expectations

Weak corporate earnings in Q1 and Q2 have dampened expectations for Q3 results. Export-driven sectors may benefit from a weaker rupee, but a broader recovery remains uncertain.

7. Weak Economic Growth

India’s GDP growth is projected at 6.4% for FY25, the slowest in four years, raising valuation concerns and increasing selling pressure.

8. Slim Hopes for US Fed Rate Cuts

Strong US economic data has diminished the likelihood of a Federal Reserve rate cut. Rising US bond yields and persistent inflation expectations have further hit sentiment in emerging markets like India.

Sectoral Highlights

• All sectors ended in the red.

• Top Losers:

• Realty: -6.47%

• Media: -4.54%

• Consumer Durables: -3.94%

Top Movers

Gainers:

• Piramal Pharma: ₹232 (+5.15%)

• Crisil: ₹5,806 (+2.30%)

Losers:

• Just Dial: ₹899 (-13.12%)

Key Developments

• Biocon: Gained 1.18% after the US FDA cleared its Malaysian insulin facilities, boosting its biosimilars portfolio.

• Zen Technologies: Declined 7.80% after approving a $10M investment in its US subsidiary to expand in the defense market.

• NBCC: Dropped 6.58% despite signing a ₹3,500 crore MoU for a mixed-use development project in Lucknow.

• Godrej Properties: Fell 5.77% after launching a premium project in Hyderabad valued at ₹1,300 crore.

• CAMS: Declined 5.33% despite crossing 1 crore e-policies milestone and launching its “Bima Central” platform.

Macro-Economic Data

• India CPI: Fell to 5.22%, a four-month low, offering some positive sentiment for the economy.

• Global Indicators:

• US bond yields: 4.76%

• Dollar Index: 109.72

Conclusion

Today’s market witnessed a sharp decline driven by rising crude oil prices, rupee depreciation, and persistent FPI selling. Investors are bracing for more volatility ahead of the Union Budget 2025 and key macroeconomic data. Defensive sectors like IT, FMCG, and Oil & Gas may see interest in the coming week, with stock-specific action dominating the narrative.

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