Sensex and Nifty End Slightly Higher Amid Market Caution After Heavy Sell-Off

Stock Markets Recover Marginally After HMPV Scare; Investors Await Corporate Earnings and Union Budget Updates

New Delhi, January 7: After a sharp sell-off in the previous session, the Indian stock market indices closed marginally higher on Tuesday, buoyed by improved global cues and investor focus shifting towards corporate earnings and upcoming GDP data.

The BSE Sensex settled at 78,199.11 points, gaining 234.12 points (0.30%), while the NSE Nifty ended at 23,707.90 points, rising 91.85 points (0.39%).

Recovery After HMPV-Induced Sell-Off

Monday’s market crash was triggered by investor panic over the detection of two Human Metapneumovirus (HMPV) cases in India, coupled with weak global signals and sustained Foreign Institutional Investor (FII) outflows.

“Amid positive global cues indicating no significant concerns about HMPV, the domestic market managed to recover partially from Monday’s sharp decline. However, trading remained range-bound ahead of the First Advance Estimates of India’s FY25 GDP,” said Vinod Nair, Head of Research at Geojit Financial Services.

He added, “Growth expectations remain moderated after the RBI revised its projection downwards. Markets are likely to remain cautious in the near term, with a focus on corporate earnings, FII activity, and the global economic outlook.”

Key Drivers for Market Sentiment

• Corporate Earnings (Q3 Results): Investors are closely monitoring October-December quarter earnings for signs of economic recovery.
• Union Budget Expectations: Hopes are pinned on pro-growth policies and economic reforms in the upcoming Union Budget.
• Global Trends: Investors are also eyeing the policy direction under the Trump 2.0 administration in the US.

Market Trends and Performance

The Sensex remains nearly 8,000 points below its all-time high of 85,978 points, reflecting ongoing market caution.

In recent years:

• 2024: Sensex and Nifty gained around 9-10% each so far.
• 2023: Indices recorded gains of 16-17% cumulatively.
• 2022: Markets saw marginal growth of just 3%.

Outlook Ahead

The market sentiment remains fragile amid concerns over weak GDP growth, foreign fund outflows, rising food prices, and sluggish consumption patterns.

However, experts believe that corporate earnings data, clarity on Union Budget measures, and global cues will dictate market trends in the coming weeks.

Investors are advised to tread cautiously, with a focus on sectors poised for growth in the current economic landscape.