Amid FII outflows and global cues, Indian equity markets remain under pressure as IT and pharmaceutical stocks show resilience.
December 20, 2024: Indian equity markets continued their downward trend on Friday, with the BSE Sensex falling 305 points to 78,899 in early trading, and the Nifty slipping 80 points to trade at 23,882. While IT stocks initially provided some relief, buoyed by Accenture’s robust quarterly earnings, they too succumbed to broader market pressure as the session progressed.
The markets experienced a brief recovery around 9:45 AM before hitting intraday lows. Of the 30 Sensex components, 17 were trading in the red. Major laggards included Axis Bank, Larsen & Toubro, ITC, UltraTech Cement, and JSW Steel, which fell up to 1.56%. On the upside, NTPC, TCS, Bajaj Finance, Asian Paints, and Bharti Airtel were among the gainers, with gains of up to 1.36%.
Foreign and Domestic Investment Trends
Foreign Institutional Investors (FIIs) continued to offload equities, withdrawing ₹4,224.92 crore on Thursday alone. However, Domestic Institutional Investors (DIIs) injected ₹3,943.24 crore into the market, providing some support.
Also Read: US Federal Reserve Cuts Interest Rate by 0.25%: Markets React Sharply
Expert Insights
V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted the reversal of FII buying seen earlier in December. “This week’s FII outflows have totaled ₹12,229 crore, heavily impacting large-cap financials. Despite the current trend, quality large-cap stocks are likely to rebound, offering retail investors a contrarian opportunity,” he said.
Also Read: India’s GDP Growth to Stabilize at 6.5-7%: CRISIL Report
Vijayakumar also highlighted the resilience of the pharmaceutical sector and the strength in IT stocks, driven by Accenture’s optimistic results and the growing impact of generative AI as a profit driver for tech companies.
On global influences, he remarked, “The Federal Reserve’s recent commentary on a slower rate-cut trajectory has triggered short-term market reactions, but recovery, led by large-cap stocks, is expected soon.”
Technical Analysis
Anand James, Chief Market Strategist at Geojit Financial Services, provided a technical outlook: “The presence of key moving averages near the 23,859 level raised hopes of a recovery yesterday. While a pullback is expected today, resistance near the 24,070-24,100 range may limit gains. Sustained trade above 23,950 will be crucial for further recovery.”
Global Market Cues
In Asia, markets opened mixed on Friday as investors reacted to Japan’s inflation data and awaited China’s interest rate decision. Early indicators from Gift Nifty pointed to a weak start for Indian markets.
In the U.S., major indices closed near flat on Thursday. The Dow managed a slight gain, breaking a ten-session losing streak, while the S&P 500 and Nasdaq edged down by around 0.1%. Meanwhile, European markets slumped in response to the Fed’s guidance indicating fewer rate cuts in the near future.
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