Stay updated on market trends, sector performance, and economic developments driving investor sentiment
Stock Market Update December 16, 2024 – Indian equity markets started the week on a volatile note, with benchmark indices BSE Sensex and Nifty 50 trading in the red. The Sensex declined 382.46 points or 0.47%, hovering at 81,750.66 by 11 AM. Meanwhile, the Nifty 50 slipped 108 points to 24,660.20, reflecting a 0.44% drop. Mixed global cues and investor caution ahead of critical economic data and the US Federal Reserve’s policy decision later this week weighed on sentiment.
At mid-morning, only a handful of heavyweight stocks registered gains on both indices. IndusInd Bank led the gainers, rising 1.05%, followed by Bajaj Finance, Power Grid Corporation, and ICICI Bank. On the flip side, Titan Company suffered a sharp decline of 1.61%, with JSW Steel, Tech Mahindra, Bharti Airtel, and Mahindra & Mahindra following closely behind. On the Nifty 50, similar trends were observed with BPCL slipping 1.64%, alongside Titan and Adani Ports.
Most sectoral indices struggled, amplifying market weakness. The Nifty Metal Index saw the sharpest decline, losing 1.06% amid global commodity pressures. The Oil & Gas sector dropped 0.81%, while the IT and Auto indices slipped 0.61% and 0.56%, respectively. Sectors like FMCG, Financial Services, and Healthcare also traded in the red.
Broader markets, however, showed resilience. The Nifty Midcap 100 gained 0.28%, and the Nifty Smallcap 100 advanced 0.32%, indicating that midcap and smallcap stocks maintained their upward trajectory. Over the past month, these indices have delivered significant returns, with smallcap stocks outperforming their largecap counterparts despite predictions of a correction.
Investors are navigating multiple economic factors ahead of key data releases, including November’s Wholesale Price Index (WPI), trade balance figures, and HSBC’s India Composite, Manufacturing, and Services PMI data. Global macroeconomic cues remain a critical factor, with the US Federal Reserve expected to decide on policy rates later this week. The outcome could influence capital flows into emerging markets like India.
Foreign funds have been shifting away from emerging and developed markets as investors concentrate on US assets. This trend has intensified in anticipation of Donald Trump’s return to the White House, prompting foreign portfolio investors (FPIs) to reallocate their positions. Nevertheless, domestic markets have rebounded sharply from their recent lows in late November. The Nifty 50, for instance, has risen 6.1%, while the Midcap 100 and Smallcap 100 indices surged 8.5% and 10.3%, respectively.
Friday’s positive close offered some relief. The BSE Sensex ended higher at 82,133.12, gaining 843.16 points or 1.04%, while the Nifty 50 rose 0.89% to close at 24,768.30. Gains were led by sectors such as FMCG, IT, and Consumer Durables. However, losses in Media, Metal, and Realty sectors limited overall optimism.
Asian markets displayed mixed performance on Monday. Japan’s Nikkei 225 traded flat with a slight positive bias, while the Topix Index fell 0.14%. South Korea’s Kospi dipped 0.08%, but the small-cap Kosdaq index managed a gain of 0.53%. Hong Kong’s Hang Seng Index declined 0.08%, and China’s CSI 300 was down 0.59%. Australia’s S&P/ASX 200 shed 0.29%, reflecting cautious investor sentiment across the Asia-Pacific region.
Global equity markets remain influenced by concerns about interest rates. On Friday, US stocks traded mixed as investors awaited clarity from the Federal Reserve. The Dow Jones Industrial Average fell 0.20% to 43,828.06, while the S&P 500 remained nearly flat at 6,051.09. The Nasdaq Composite managed a modest gain of 0.12%, closing at 19,926.72, driven by strong performance from chipmaker Broadcom.
Bond yields continued to rise as traders bet on a more cautious stance from the Federal Reserve. The yield on the US 10-year Treasury climbed to 4.399%, marking a three-week high, while the 30-year bond yield reached 4.605%. Investors remain concerned about inflation, which continues to hover above the Fed’s target of 2%.
Currency markets saw the US Dollar Index eye its largest weekly gain in a month. On Monday, the index traded at 106.94, reflecting cautious optimism about slower interest rate cuts. Meanwhile, energy markets surged as oil prices hit three-week highs amid supply concerns. US Crude settled at $71.29 per barrel, gaining 1.8%, while Brent Crude rose to $74.49 per barrel, up 1.5%.
Precious metals remained under pressure, with spot gold falling 1.2% to $2,649.04 per ounce. A stronger dollar and rising bond yields weighed on gold prices as investors sought safer havens amid global uncertainties.
As the year-end approaches, markets remain highly reactive to economic data, geopolitical events, and policy decisions. Analysts are closely monitoring the evolving global financial landscape, particularly in the context of Donald Trump’s policy outlook for 2025. The uncertainty surrounding US interest rates, inflation, and trade policies adds another layer of volatility to global markets.
In the Indian context, while largecap indices remain volatile, midcap and smallcap segments continue to attract investor interest. Market experts note that the strong performance of broader markets reflects growing confidence in domestic growth prospects. Rising domestic participation through systematic investment plans (SIPs) and mutual funds has provided a buffer against FPI outflows.
The focus now shifts to the Federal Reserve’s rate outlook and India’s upcoming economic indicators, which could provide fresh direction for the markets. While volatility persists, India’s economic fundamentals remain strong, offering resilience amid global uncertainties. The balance between domestic growth prospects and external risks will determine market trends in the days ahead.
In conclusion, Indian equity markets face near-term challenges as investors tread cautiously. The Sensex and Nifty remain under pressure, while broader markets show relative strength. With global cues, economic data, and monetary policy decisions in focus, market participants are bracing for further volatility in the coming sessions.
