Indian Markets See Modest Gains Amid Volatile Trading and Foreign Pressure

Indian stock markets closed with slight gains on Friday as Sensex and Nifty saw modest increases despite market volatility. Selling pressure from foreign investors has limited gains amid economic challenges. Experts highlight the ongoing consolidation, with markets awaiting stronger earnings indicators to sustain rallies.

Indian stock indices secured their morning gains by the closing bell on Friday, with the Sensex reaching 78,699.07 points, marking a rise of 226.59 points or 0.29%, while Nifty closed at 23,813.40 points, up 63.20 points or 0.27%. Despite these gains, Sensex remains significantly below its all-time high.

Ajit Mishra, SVP for Research at Religare Broking, noted that markets displayed volatility but ultimately closed with modest gains, highlighting a phase of consolidation. Experts attribute the inability to maintain early rally momentum to foreign investor selling pressure, which is expected to persist absent strong earnings indicators.

In 2024, Sensex and Nifty recorded 9-10% growth with a few sessions remaining. This follows gains of 16-17% in 2023 and 3% in 2022. Economic challenges, including weak GDP growth, foreign fund outflows, and rising food prices, have deterred investors.

Foreign portfolio investors (FPIs) have dominated the market as net sellers for two consecutive months until November but shifted to net buyers in December, purchasing stocks worth Rs 16,675 crore. Weak triggers and caution ahead of the swearing-in of a new US administration impacted Christmas week trading.

Vinod Nair, Head of Research at Geojit Financial Services, remarked on subdued trading due to a lack of significant market triggers and anticipated adverse economic impacts. The rupee also fell to a new low amid expectations of limited Fed rate cuts and a widening trade deficit.

(With inputs from agencies.)