India’s benchmark equity indices, the BSE Sensex and the Nifty 50, opened sharply lower on Monday due to rising global concerns.
Stock market crash
Benchmark equity indices, the BSE Sensex and the NSE Nifty 50, closed lower in the first trading session of the week, losing over 1 percent each. The 30-share Sensex closed down 1,031.65 points, or 1.35 percent, at 76,347.26, trading in a range of 77,128.35 to 76,249.72 throughout the day.
Similarly, the Nifty 50 ended 345.55 points or 1.47 percent lower at 23,085.95. The Nifty 50 touched a high of 23,340.95 and a low of 23,047.25 during the session.
Bears dominated the market, with 46 out of 50 stocks in the Nifty50 closing in the red. Among the top losers were Adani Enterprises, Trent, BPCL, Power Grid Corporation, and Bharat Electronics, with losses reaching 6.21 percent. On the other hand, Axis Bank, TCS, Hindustan Unilever, and IndusInd Bank were among the four stocks that ended in the green, gaining as much as 0.78 percent.
The broader market index also reflected the downward trend with both the Nifty Small Cap 100 and Nifty Mid Cap 100 indices falling over 4 percent.
All sectoral indices on NSE ended in negative territory. The Nifty Realty Index was the worst hit, falling 6.47 percent, followed by the Nifty Media Index, which fell 4.54 percent. Other sectors such as Nifty PSU Bank, Metals, Consumer Durables, and Healthcare also saw declines of over 3 percent.
‘FIIs will continue to sell, providing opportunities for long-term investors’
“The market will continue to be under pressure from several strong headwinds. Blowout jobs data from the US with job creation of 2.56 lakh compared to expectations of 1.65 lakh in December means expectations for a rate cut in 2025 The economy needs no stimulus, with unemployment down to 4.1 percent, which is proving to be bad news for many markets this year Was missing.
Brent crude price rising to $81 is worrying for India. But the IIP figure for November at 5.2 percent showed that the economy was recovering slowly in the second quarter.
The strength of the US economy bodes well for IT stocks, which have remained resilient even during market weakness. Pharma and healthcare stocks will be under less pressure as demand conditions are good. With the US 10-year bond yield above 4.7%, FIIs will continue to sell opportunities for long-term investors to buy reasonably priced large caps, especially in banking. The broader market will remain under pressure.”
Views by: Dr VK Vijay Kumar, Chief Investment Strategist, Geojit Financial Services
Global indicators
Asian markets fell on Monday, while the dollar held near a 14-month high after a stronger-than-expected US jobs report. Strong payrolls data contributed to rising bond yields and raised concerns over high equity valuations as earnings season begins.
U.S. Labor Department data showed the economy added 256,000 jobs in December, beating analysts’ expectations of 160,000, according to a Reuters poll.
This strong jobs report focused on Wednesday’s consumer price index data. This could significantly lower expectations for a decline in the core inflation rate above the 0.2% forecast.
Oil prices rose to a four-month high as signs of a drop in crude oil shipments from Russia following US sanctions added to market pressure.
Markets have already cooled their expectations for a Federal Reserve rate cut in 2025, now expecting a cut of just 27 basis points for the year. The terminal rate is seen at around 4.0%, lower than earlier expectations of 3.0%.
“Given such strong data, we now expect the Fed to cut rates just once this year, by 25bps in June,” said Barclays’ Christian Keller. He noted that the economy is likely to slow down in the coming quarters, with inflation continuing to decline. before tariffs contributed to inflationary pressures in the second half.
At least five Federal Reserve officials are scheduled to speak this week, with New York Fed President John Williams set to address the market on Wednesday.
The tight stance on rates pushed the 10-year Treasury yield to a 14-month high of 4.79%, trading at 4.764% in Asia.
Higher yields on risk-free bonds increase the discount rate for corporate income, making bonds more attractive than equities, cash, real estate and commodities. That could weigh on investor sentiment as earnings season begins, major banks such as Citigroup, Goldman Sachs, and JP Morgan reported Wednesday.
In Asia, trading volume was lightened by a holiday in Japan, with MSCI’s broadest index of Asia-Pacific shares outside Japan down 0.4%. Hong Kong’s Hang Seng index fell 1.6 percent, trading below 19,000 for the first time since last September. The CSI 300 index in mainland China fell 0.38%, and the Shanghai Composite shed 0.37%. South Korea’s Kospi fell 0.85 percent, while Australia’s S&P/ASX 200 fell 1.24 percent.
In China, trade data for December is expected later on Monday, followed by GDP, retail sales, and industrial production data on Friday.
U.S. stock futures also declined, with both S&P 500 futures and Nasdaq futures down 0.1 percent after Friday’s pullback. Wall Street was lower on Friday, with 10 of 11 S&P 500 sectors closing in the red, led by declines in financials, real estate, technology and consumer staples. Energy stocks were the only sector to finish higher. The three major indexes posted losses for the second week in a row.
The Dow Jones Industrial Average fell 1.63% to 41,938.45, the S&P 500 fell 1.54% to 5,827.04, and the Nasdaq Composite fell 1.63% to 19,161.63.
Rising Treasury yields have supported the dollar, causing the euro to fall for eight consecutive weeks and hover just above $1.0240, its lowest level since November 2022.