Market Jitters: Sensex and Nifty End the Week on a Downtrend

Indian stock markets faced a downturn as Sensex and Nifty indices closed lower, influenced by volatile trading sessions. Persistent FPI selling and anticipated policy shifts from Donald Trump’s upcoming presidency weigh heavily on investor sentiment, urging analysis of market strategies moving forward.

Indian stock indices closed the week on a downward trend, signaling persistent volatility. On Friday, the Sensex dropped to 76,619.33 points, a fall of 423.49 points or 0.55%, while Nifty fell to 23,203.20 points, decreasing by 108.60 points or 0.47%. The IT sector witnessed the steepest decline, with a 2.68% slump.

Market experts highlighted continued selling pressure from foreign portfolio investors (FPIs) as a key factor affecting indices. Additionally, the anticipated inauguration of Donald Trump is creating further market unpredictability, as investors are on edge about potential executive orders regarding tariffs and taxes.

Ajit Mishra, SVP of Research at Religare Broking, observed a nearly half percent market dip following three days of gains, driven by early weaknesses in IT and banking sectors post-earnings announcements. However, resilience in firms like Reliance, ITC, and LT helped contain the decline. Persistent FII selling and a mixed earnings season are dampening upward moves, with experts advising a 'sell on rise' approach amid stock-specific opportunities.

Over the past week, both the Nifty-50 Index and Sensex have lost approximately 1%, with mid-cap and small-cap indices also mirroring this trend. Earnings results have failed to lift market morale, compounded by rising crude oil prices and depreciation of the INR.

Shrikant Chouhan, Head of Equity Research at Kotak Securities, noted that market sentiment has been hampered by weak domestic economic growth. Despite a cumulative growth of 9-10% in 2024 and a 16-17% rise in 2023, the market reflects investor hesitations due to weak GDP growth, foreign fund outflows, and escalating food prices.

The Sensex now remains approximately 10,000 points shy of its all-time high, having dropped 2.5% this year alone.

(With inputs from agencies.)