Get insights into global trends, sectoral movements, and what’s shaping the markets as 2024 comes to a close
The Indian stock market showed subdued activity on Monday, December 30, 2024. Benchmark indices BSE Sensex and Nifty50 traded within a narrow range, reflecting weak sentiment influenced by global market trends. At mid-morning, the BSE Sensex was up by 17.14 points, or 0.02%, at 78,716.21. The Nifty50, however, edged slightly lower by 7.10 points, or 0.03%, at 23,806.30.
Stock Performance Overview
After the opening bell, 13 out of the 30 stocks on the BSE Sensex index traded in the green. Gains were led by Adani Ports & SEZ, which rose 0.95%, followed by ITC, Bharti Airtel, Zomato, and Nestle India. On the other hand, Mahindra & Mahindra dropped 0.88%, followed by Titan, Maruti Suzuki India, HCLTech, and Tech Mahindra, all weighing on the index.
On the Nifty50, 15 stocks traded higher. Adani Enterprises outperformed with a 2.67% gain, while Adani Ports, Bharti Airtel, ITC, and Coal India also posted positive performances. Losses were led by Trent, which fell 1.20%, followed by BPCL, ONGC, Mahindra & Mahindra, and Hindalco Industries.
Sectoral Performance
Most major sectoral indices traded in negative territory, with the Media, Oil, and Auto sectors experiencing the steepest declines. The Media and Oil indices fell by 0.53%, while the Auto index declined by 0.46%. Consumer Durables, IT, and financial sector indices also faced pressure during the session.
In contrast, the Healthcare and Pharma sectors bucked the trend, with the Healthcare index rising 0.288% and the Pharma index edging up 0.19%. Broader markets also struggled, with the Nifty Smallcap 100 and Nifty Midcap 100 indices slipping by 0.44% and 0.32%, respectively.
Global Market Influence
Global market conditions weighed on domestic sentiment. Asian shares were mostly lower as high Treasury yields in the United States impacted equity valuations. Volumes across markets remained thin due to the upcoming New Year holiday, and data releases scheduled for later in the week further limited activity.
Japan’s Nikkei fell 0.75%, while mainland China’s CSI 300 and Shanghai Composite dipped 0.15% and 0.14%, respectively. The Hong Kong Hang Seng index managed a modest gain of 0.17%. South Korea’s Kospi rose 0.65%, supported by gains in broader indices like Kosdaq, which added 1.5%.
On Wall Street, major indices closed the previous week with losses. The S&P 500 dropped 1.11%, the Nasdaq Composite fell 1.49%, and the Dow Jones Industrial Average slipped 0.77%. Despite the pullback, the S&P 500 and Nasdaq are up 25% and 31% for the year, respectively, underscoring strong annual performances.
Primary Market Activity
The IPO market remains active as investors prepare for a new round of public offerings. Four mainline IPOs and two SME IPOs are set to debut this week. Indo Farm Equipment’s IPO will open for subscription, along with the SME IPOs of Leo Dry Fruits and Technichem Organics. The IPO segment has seen strong performance in 2024, with an average first-day gain of 31%, though slightly below the 40% gains recorded in 2023.
Key Economic Updates
Deloitte recently projected India’s economic growth at 6.5% to 6.8% for the fiscal year, with expectations of higher growth between 6.7% and 7.3% in FY2026. The firm attributed this optimism to strong domestic consumption. However, weaker-than-expected growth numbers in the second quarter have prompted economists to call for fiscal reforms in the upcoming Union Budget. These reforms are expected to focus on boosting consumption, manufacturing, and employment.
Meanwhile, gold and silver exchange-traded funds (ETFs) have seen record demand this year, with inflows totaling Rs 19,000 crore compared to Rs 9,485 crore in 2023. This trend is attributed to higher gold and silver prices and favorable tax adjustments.
Key Observations in Commodities
Gold continues to shine, closing the year with a remarkable 28% gain to reach $2,624 per ounce. The strength of the U.S. dollar has tempered further price increases, but demand for gold remains robust as a safe-haven asset.
Oil prices, however, have faced pressure throughout the year due to concerns over demand, particularly from China. Brent crude was down 37 cents to $73.80 per barrel, while U.S. crude slipped 17 cents to $70.43. OPEC+ has extended its deal to limit supply, but the impact has been limited given broader market concerns.
Market Outlook for 2025
Analysts expect domestic markets to remain volatile in 2025. The performance of key sectors, including financials, IT, and auto, will depend on global developments such as U.S. inflation trends, Federal Reserve interest rate decisions, and geopolitical factors.
Jimeet Modi, CEO of Samco Group, noted that Q3 FY25 earnings are likely to mirror the subdued performance seen in Q2, as demand concerns persist in several sectors. Modi added that volatility in the U.S. markets and recession risks could have a ripple effect on Indian equities.
The Indian stock market on December 30, 2024, reflected broader market concerns and weak global cues. Benchmark indices traded flat, with gains in select sectors offset by declines in others. Investors remained cautious, awaiting clarity on key economic data and global trends as the year comes to a close.
Heading into 2025, market participants will focus on corporate earnings, macroeconomic policies, and global developments to navigate volatility and identify growth opportunities. While challenges remain, the resilience of the Indian market and its ability to adapt to changing conditions suggest a cautiously optimistic outlook for the new year.
