Indian Stock Market on 03.01.25

After a solid run the day before, the Indian stock markets took a dive on Friday, January 3, with both the Sensex and Nifty 50 tumbling, driven largely by profit booking and a rising US dollar. The Sensex opened slightly higher but quickly lost steam, plummeting 834 points to hit an intra-day low of 79,109.73. It recovered a bit before closing down 721 points, or 0.90%, at 79,223.11. Meanwhile, the Nifty 50 had a similar tale of decline, dipping 213 points at one point, before settling 184 points lower at 24,004.75. While the large-cap stocks took a beating, the mid and small-cap indices fared better. The BSE Midcap index slid only 0.33%, and the Smallcap index barely budged, down just 0.02%. But the real action was in the sectors: banks, financials, IT, and pharma bore the brunt of the day’s losses. Nifty Bank dropped 1.20%, while Nifty IT and Nifty Pharma each saw declines of over 1%. Experts pointed to profit-taking in heavyweight stocks like HDFC Bank, ICICI Bank, TCS, and Zomato as the primary culprits behind the downturn. With valuations stretched and earnings under pressure, investors are looking for ways to lock in gains before the market hits a rough patch. The dollar, meanwhile, is hitting two-year highs against a basket of currencies, further pressuring emerging markets like India. Looking ahead, analysts predict volatility will be the theme in January, with key events like the US Fed’s policy meeting at the end of the month, India’s Union Budget presentation on February 1, and the RBI’s monetary policy review in early February adding to the market’s jitters.  On the commodity front, gold and oil saw modest gains. Gold prices edged higher by ₹330, with 24-carat gold now priced at ₹7851.3 per gram. Silver remained flat at ₹93,500 per kg, while oil prices continued their upward trend. Brent crude climbed 0.2%, reaching $76.09 per barrel, buoyed by hopes that global governments will ramp up policy support to spark economic recovery and fuel demand.