Indian Stock Market Slumps as Sensex and Nifty Drop Over 1% Amid Widespread Selling

The Indian stock market saw a sharp decline on Monday, January 6, 2025, with both the Sensex and Nifty 50 falling by over 1% as widespread selling took hold. The Sensex plummeted by more than 900 points, while the Nifty 50 dropped below the crucial 23,800 level. All sector indices closed in the red, with the Nifty PSU Bank, Metals, Oil & Gas, Realty, and Media sectors bearing the brunt of the losses. Both the Nifty Midcap 100 and Smallcap 100 indices saw declines of more than 2%.

Top Losers and Gainers

Among the largest losers were Tata Steel, BPCL, and Adani Enterprises, while Titan and Bajaj Finance were among the few stocks that recorded gains during the session.

Market Drivers and Analyst Insights

Market analysts pointed out that persistent negative factors impacting Foreign Institutional Investor (FII) flows, combined with some positive domestic developments, are likely to influence the market’s direction in the coming days. The global macro environment remains challenging, with the US dollar index at 109 and the 10-year US bond yield at 4.62%. Analysts expect FIIs to continue offloading stocks until bond yields decrease and the dollar stabilizes.

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, observed that December’s auto sales figures indicated that the slowdown in urban demand might be overstated. He believes robust domestic sectors will continue to support the market, especially during downturns.

Asian Markets Show Mixed Results

Asian stock markets exhibited mixed results, following Wall Street’s recovery from a sluggish holiday period. Tokyo and China’s markets saw declines, while Japan’s finance minister marked the New Year in a traditional fashion as Tokyo’s market resumed trading, with staff dressed in suits and kimonos for good fortune in 2025.

Technical Outlook – Nagaraj Shetti, Senior Technical Research Analyst, HDFC Securities

Nifty 50 experienced selling pressure near the 24,200 levels after its sharp rally on January 2. The index is approaching crucial support at the 23,900 level, with further declines potentially finding strong support around 23,750. Analysts suggest that any consolidation or dips could present a buying opportunity, with expectations of a potential rebound towards the 24,200 resistance in the near term.

Technical Stock Picks for the Week

  • Buy PNB Housing Finance Ltd at ₹919.50, Target ₹970, Stoploss ₹890, Timeframe: 1 week.
  • Buy Narayana Hrudayalaya Ltd at ₹1,331, Target ₹1,400, Stoploss ₹1,290, Timeframe: 1 week.

Disclaimer: The views and recommendations expressed above are those of individual analysts, experts, and broking companies, and not those of the publication.

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