Stock Market Crashed: Indian stock market witnessed a massive crash on Monday, January 13, with Sensex nosediving by 844 points and erasing its 77,000 mark once again. Nifty 50 also faced a heavy bearish trend, toppling by as much as 259 points and reaching below 23,200 levels. The market is expected to be under intense pressure with strong headwinds. Brent crude is above $81 per barrel, while sharper than expected surge in US jobs data coupled with consistent FIIs selling and Q3 earnings have taken a toll on the market.
Sensex In Bloodbath:
Sensex shed as much as 843.67 points to hit an intraday low of 76,535.24. Currently, the benchmark traded at 76,771.12, lower by 607.79 points or 0.79%. The benchmark had opened at 76,629.90, compared to the last week's Friday closing price of 77,378.91.
Axis Bank, IndusInd Bank, TCS, and Infosys were the only top gainers, with HCL Tech trading volatile ahead of its Q3 results. Sharp selloffs were seen in Zomato, Tata Steel, Tech Mahindra, Adani Ports, M&M, Asian Paints, Power Grid, HDFC Bank, Sun Pharma, Kotak Bank, ICICI Bank, Tata Motors and ITC which tumbled by 1% to 4.5%.
Out of the 30 scrips on Sensex, 25 were in deep red. While only five advanced.
Nifty 50 Sees Black Monday:
Nifty 50 dropped by 203.50 points or 0.87% to trade at 23,228, at the time of writing, underperforming peer Sensex. The 50-scrip benchmark plummeted by at least 258.8 points to hit an intraday low of 23,172.70. Out of the total 50-scrips listed on Nifty 50, 44 stocks had declined and only 5 advanced.
Bank Nifty shed at least 1%, while Nifty Midcap 100 and Nifty Smallcap 100 indexes dipped by over 2.4% each. India's volatility index surged by more than 6% and even hit an intraday high of 6.11.
All indices were in red. The most selling was seen in the Nifty Realty index which fell by 4.2%, followed by the Nifty Consumer Durables Index down by 2.8%, the Nifty Midsmall Healthcare Index down by 2.13%, the Nifty Metal Index lower by 2.11%, the Nifty Media index down 1.6%, and Nifty Auto index which slipped by 1.6% as well.
Why Is the Stock Market Falling?
Dr. V K Vijayakumar, Chief Investment Strategist, at Geojit Financial Services, explained that the market will continue to be under pressure from the many strong headwinds. The blowout jobs data from the US with 2.56 lakh job creations in December against expectations of 1.65 lakhs means the rate cut expectations in 2025 are now down to one. With the unemployment in the US down to 4.1% the economy doesn't need any stimulus. This good economic news is turning out to be bad news for markets which were discounting many rate cuts this year.
For India, he said, the Brent crude rising to $81 is a concern. However, the IIP data for November at 5.2% indicates that the economy is recovering from the slowdown in Q2.
Meanwhile, he further said, the strength of the US economy augurs well for IT stocks which have been resilient even during weakness in the market. Pharma and healthcare stocks will be under less pressure since the demand situation is good. With the US 10-year bond yield above 4.7 % FIIs will continue to sell offering opportunities for long-term investors to buy reasonably priced large-caps, particularly in banking. The broader market will continue to be under pressure.
For the entire week, Vinod Nair, Head of Research, Geojit Financial Services said, corporate earnings will be in the spotlight, with major companies, including IT giants, releasing their Q3 results. Macroeconomic data, such as India's inflation rate and industrial production figures, will also play a crucial role in shaping market direction. On the global front, updates on the U.S. economy, particularly labour market data and inflation trends, may impact FII flows. A spike in crude oil prices will add inflationary pressure. Overall, market volatility is expected to remain as investors react to a mix of earnings, macroeconomic data, and global cues.
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