Sensex and Nifty Plunge Amid HMPV Scare, Rupee Weakness, and Global Uncertainty

Indian markets witness sharp decline as virus fears, FII selling, and global cues dampen investor sentiment.

Mumbai, January 6: Indian stock markets faced a steep decline on Monday, with both the BSE Sensex and NSE Nifty 50 closing sharply lower amid rising fears over the detection of Human Metapneumovirus (HMPV) cases in India, a weakening rupee, and global economic uncertainty.

The Sensex closed at 77,964.99, falling by over 1,258 points, while the Nifty 50 ended at 23,616.05, down by 388 points. Sectoral indices across the board were in deep red, with PSU banks falling by 4% and midcap and smallcap indices declining between 2-3%.

Virus Scare and Market Jitters

Market experts believe that the recent detection of HMPV cases in Karnataka has triggered investor panic. Health advisories from state governments have added to the unease, causing retail investors to step back.

“The virus scare has certainly added pressure to an already fragile market sentiment. Retail investors, especially newcomers, are wary of market movements amid these uncertainties,” said Shriram Subramanian, founder of InGovern Research Services.

Rupee Weakness and FII Selling Add to the Woes

The Indian rupee’s depreciation against the US dollar further exacerbated investor concerns. Foreign Institutional Investors (FIIs) have also been consistently selling, with a net outflow of ₹4,227.25 crore on January 3 alone.

Market and banking expert Ajay Bagga highlighted the multiple stress points: “The markets are grappling with economic slowdown, muted corporate earnings growth, sustained FII selling, and global pressure from a strong US dollar and high yields.”

Global Uncertainty and Policy Concerns

Concerns over US trade policies under President-elect Donald Trump, particularly regarding tariffs on Chinese goods, have added to market nervousness. Additionally, comments from US Federal Reserve Governor Christopher Waller suggesting that interest rate cuts may not be imminent have dampened investor hopes.

Top Losers and Sectoral Impact

Major losers on the NSE included Apollo Hospital, Titan, Tata Consumers, HCL, and Dr Reddy. On the BSE, Tata Steel, Trent, NTPC, BPCL, and Coal India were among the worst performers.

Looking Ahead: Earnings Season and Union Budget

Experts predict that the upcoming corporate earnings season and the Union Budget could provide some direction to the markets. However, expectations remain muted given the lackluster earnings seen in the previous quarter.

“The earnings season might provide some support, but all eyes are on global cues and domestic policy decisions. Investors are awaiting clarity on Trump’s trade policies and cues from the Union Budget,” added Vijay Chopra, a market expert.

Market Outlook

With multiple headwinds, including global uncertainty, virus fears, rupee depreciation, and profit-booking pressures, markets are expected to remain volatile in the near term. Investors are advised to remain cautious and focus on long-term opportunities amid ongoing market fluctuations.