Tech Stocks Lead 1% Market Decline on New Year’s Eve
Year’s Eve, which was evident in the equity markets’ decline. The BSE Sensex declined by more than 680 points during the session, and the NSE Nifty fell below 23,500 on profit-booking because of high valuation and global factors. Its partners and financial services were the worst affected.
IT Sector Leads Declines Amid Broader Market Weakness
The IT sector experienced considerable pressure, which was a major contributing factor to the slowdown. Tech Mahindra shares plunged 3.23% to ₹1,690.25, emerging as one of the biggest losers in the industry. TCS was next with a 2.55% drop, followed by Zomata and HCL Technology with 2% and 1.55%, respectively.
The sectoral index, Nifty IT, declined by 1.78%, which shows that technology-related stocks have weak sentiment. The Nifty Mid small IT & Telecom indices, which comprise the broader industry, also fell, signifying the negative trend across technology firms
However, some stocks in other categories could sustain themselves in the green despite the tech-driven selloff. Among the gainers, Kotak Mahindra Bank added 1.23%, while Tata Motors and SBI edged up as the overall trading was subdued and bearish.
BFSI and Auto Sectors Face Moderate Pressure
Market declines were further compounded by financial services, which Bajaj Finance and IndusInd Bank reduced by 1%. The financial services index, the Nifty Financial Services Ex-Bank, fell by 1.06%, showing conservative investors’ approach in the broad-based BFSI space. Industry experts attributed FPI selling in Indian equities to high yields on US bonds and a strong dollar.
The auto sector was relatively better placed than the Monday session’s performance. Nifty Auto lost 0.08%, while Tata Motors contributed positively.
According to VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, market nervousness was due to high valuation and geopolitical risks. Domestic institutional investors (DIIs) have continued to be buyers, although their activism was not enough to balance the selling by FPIs.
Shruti Jain, the Chief Strategy Officer of Arihant Capital Markets, expects the market to remain range-bound for the next three months due to lofty valuation and decelerating earnings. She expects a recovery later as India has a strong structure for growth.
