Indian stock markets began the week in a downward trend on Monday morning, influenced by concerns over the Federal Reserve's potential decision to maintain interest rates at their current levels for an extended period. This outlook follows unexpectedly robust U.S. non-farm payroll employment figures for December.
Investors are proceeding with caution as they analyze India's industrial production data, with a keen eye on the nation's consumer price inflation statistics, slated for release after today's trading session. Escalating crude oil prices also contribute to the market's subdued performance.
The BSE Sensex index, which plummeted more than 800 points in initial trading, recently stood at 76,803.40, reflecting a decline of 575.51 points or 0.74%. Meanwhile, the broader Nifty50 index of the National Stock Exchange, after hitting a low of 23,195.40, recovered slightly to 23,232.80, although it remains significantly down by 198.70 points or 0.85%.
Mounting selling pressure is impacting stocks across various sectors, including automotive, real estate, pharmaceuticals, oil, metals, FMCG, consumer durables, and banking.
Zomato, experiencing a decline of over 4%, is currently the biggest loser within the Sensex. Other notable decliners include Tata Steel, Adani Ports, Asian Paints, M&M, Power Grid Corporation, Sun Pharmaceuticals, and Tech Mahindra, which are down between 1.5% and 2.3%.
Kotak Bank, UltraTech Cement, Bajaj Finance, Tata Motors, ICICI Bank, ITC, Bajaj Finserv, Bharti Airtel, and HDFC Bank have also registered losses ranging from 1% to 1.4%.
In contrast, IndusInd Bank and Axis Bank are witnessing gains of 1.8% and 1.6%, respectively. Tata Consultancy Services and Infosys are showing modest increases.
On the Nifty50 index, Trent is the largest decliner with a loss of 4.7%. Other stocks under pressure include Adani Enterprises, Apollo Hospitals Enterprises, BPCL, Grasim Industries, Eicher Motors, Wipro, ONGC, Tech Mahindra, BEL, HeroMotoCorp, Cipla, and Bajaj Auto.
According to recent data from the Reserve Bank of India released on Friday, the country's foreign exchange reserves decreased by $5.7 billion, totaling $634.59 billion for the week ending January 3. Foreign currency assets specifically saw a reduction of $6.441 billion, bringing them to $545.48 billion.
The Ministry of Statistics and Programme Implementation reported that India's industrial production increased by 5.2% year-over-year in November, surpassing the 3.7% rise in October and above the anticipated 4% growth.
Manufacturing output surged by 5.8% annually, compared to a 4.4% increase in October. Mining growth accelerated to 1.9% from 0.9%, and electricity production improved by 4.4% over the previous year, up from 2% in October.
The annual inflation rate in India reduced to 5.48% in November 2024 from 6.21% in October, approaching the central bank's upper tolerance limit of 6%, which is 2 percentage points above its target of 4%.
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