Indian Stock Market Tumbles as Virus Concerns Loom; Key Stocks to Watch This Week

On Monday, January 6, the Indian stock market witnessed a sharp decline, with both the Sensex and Nifty 50 indices dropping by over 1.5%. This significant sell-off was triggered by concerns surrounding a reported outbreak of the HMP Virus in China, which sent shockwaves through global and domestic markets.

The Nifty 50 fell by 1.6%, slipping below the critical 24,000 level to close at 23,616 points, while the Sensex ended at 77,964 points, reflecting a loss of 1.59%. The downturn was broad-based, with midcap and smallcap indices losing 2-3% each, and all sectoral indices closing in the red.

Key Market Highlights

  1. HMP Virus Concerns: Reports of the first two cases of the HMP Virus in Bangalore amplified selling pressure, particularly in banking stocks and across sectors.
  2. Rupee Weakens: The Indian rupee hit a record low of ₹85.82 against the US dollar amid sustained demand for the greenback.
  3. Foreign Institutional Investors (FIIs): FIIs sold Indian equities worth ₹4,227 crore on Friday, exacerbating market volatility.
  4. Economic Data: On the brighter side, India’s Services PMI rose to a four-month high of 59.3 in December, up from 58.4 in November, indicating robust growth in the service sector.
  5. Sectoral Outlook: Positive developments in the capital goods and defense sectors hint at potential recovery in order inflows starting Q4FY25.

Expert Insights
Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, stated, “Markets are expected to remain volatile until concerns related to the new virus ease. However, sector-specific action may be observed with the onset of the Q3 earnings season.”

Top Stock Recommendations for the Week
Brokerage firm Motilal Oswal has identified three promising stocks poised for an upside move:

  1. Mahindra & Mahindra
    • Buy Price: ₹3,190
    • Stop Loss: ₹3,080
    • Target Price: ₹3,400
      The stock has shown consistent strength, breaking out of a supply trend line and forming bullish patterns. It continues to outperform in the auto sector, supported by strong momentum indicators.
  2. Kalyan Jewellers
    • Buy Price: ₹777
    • Stop Loss: ₹740
    • Target Price: ₹850
      Kalyan Jewellers is trading near its life-high levels and exhibits a robust uptrend. Technical indicators suggest the stock is positioned for a breakout, offering significant upside potential.
  3. Policy Bazaar
    • Buy Price: ₹2,215
    • Stop Loss: ₹2,100
    • Target Price: ₹2,400
      Policy Bazaar has consistently formed higher highs and higher lows, supported by strong bullish momentum and technical indicators favoring further gains.

Outlook
While the immediate market sentiment remains cautious due to virus concerns, the start of the Q3 earnings season and developments in key sectors may drive selective opportunities. Investors are advised to adopt a stock-specific approach and exercise caution in the current volatile environment.

Disclaimer: The above recommendations are based on expert analysis and are not investment advice. Please consult your financial advisor before making any investment decisions.

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