Indian Stock Market Faces Weekly Decline Amid Global Uncertainty

Indian stock indices faced declines on Friday, logging weekly losses amid global uncertainties. With pressing challenges like weak GDP growth and foreign fund outflows, investors remain cautious. Upcoming events, including the Union Budget and global policies, will significantly influence market dynamics in the coming weeks.

The Indian stock market indices experienced a downward trend on Friday, capping off a week marked by losses across multiple sectors. Notable slumps were observed in auto, media, pharma, PSU banks, realty, healthcare, and oil and gas sectors, according to data from the National Stock Exchange.

S&P BSE Sensex concluded the day at 76,190.46, dropping 329.92 points, or 0.43%, whereas the NSE Nifty closed at 23,092.20, down by 113.15 points or 0.49%. The Sensex is currently around 10,000 points below its peak recorded at 85,978 in September last year, with a 3% decline already observed in the New Year.

Indian markets are grappling with volatility due to uncertainties surrounding US President Donald Trump's policies, which potentially threaten global trade stability. Additionally, weak domestic economic growth and the selloff by foreign portfolio investors are contributing factors to the market's downturn.

In the years preceding 2024, Sensex and Nifty registered cumulative growths of 9-10% and 16-17% respectively in 2024 and 2023. Alternatively, in 2022, they only rose by 3% each. Weak GDP growth, increasing food prices, and sluggish consumption continue to deter numerous investors. V K Vijayakumar of Geojit Financial Services suggests that foreign institutional investors will persistently sell, pressuring largecap stocks, particularly in banking.

Shrikant Chouhan from Kotak Securities noted that ongoing global events, the forthcoming Union Budget, RBI policies, and the Q3 FY25 season will pivot market movements over the next weeks. The current Q3 FY25 earnings season has mostly met subdued expectations, with the INR appreciating slightly and Brent crude prices correcting.

Despite a general underperformance versus global counterparts, the BSE IT index stood out with strong performance, contrasting the broader market weakness where midcap and smallcap indices lagged behind. As foreign investors continue to exit Indian equities, pressure mounts on market performance amid anticipation of Budget 2025 announcements.

(With inputs from agencies.)