Indian Stock Market on 10.01.25

The Indian stock market is in a bit of a slump, with the bears firmly in control for the third day in a row. Both the Nifty 50 and Sensex closed Friday in the red, marking their worst weekly performance of 2025. While the IT sector managed to put up a fight, the rest of the heavyweights, especially financials, couldn’t hold the line, dragging the broader market down. The Nifty 50 ended with a 0.42% loss at 23,431, while the Sensex fell 0.39% to close at 77,378.

It was a rough day for mid- and small-cap stocks, which continued to get hammered. The Nifty Smallcap 100 index hit a six-week low, dropping 2.61%, and closed the week with a 7.29% loss. Midcaps didn’t fare much better—down 2.08% for the day and losing nearly 6% for the week. The cumulative toll on these indices from the last three trading sessions has been severe, with the Nifty Smallcap 100 now down 8.2% from its January peak.

Investors are clearly spooked by the prospect of lackluster earnings in Q3FY25. While there was hope that corporate India would bounce back strongly, the latest updates from companies haven’t been encouraging. Expectations of strong growth have been tempered by modest results, leading to fears of earnings downgrades and multiple cuts. This weak earnings season, combined with high valuations, has left investors in a cautious mood, particularly in the small and mid-cap segments.

The IT sector offered a rare bit of relief. Despite the broader market struggles, the Nifty IT index rose 1.6%, thanks to upbeat comments from Tata Consultancy Services (TCS), which saw its stock jump 3.9%. TCS hinted at a potential demand revival, particularly in North America, which could boost discretionary spending and restore confidence in the IT space.

Gold prices are on the rise today, with 24-carat gold climbing ₹380 to hit ₹7938.3 per gram, and 22-carat gold following suit with a ₹350 increase, now at ₹7278.3 per gram. The upward movement marks a modest shift in the longer-term trend, with 24-carat gold up by 0.65% over the past week and 0.99% over the last month. Silver, however, is holding steady at ₹95,500 per kilogram, showing no change from the previous session.

As for the broader market, global oil prices have seen a significant jump, with Brent crude rising 2.02% to $78.47 per barrel. This increase in oil prices could signal broader inflationary pressures, which may influence precious metal prices moving forward.

As for the rest of the market, it’s clear that worries over Q3 earnings and stretched valuations are weighing heavily on sentiment. With mid- and small-cap stocks facing heavy selling pressure and the broader indices down for the week, it’s looking like a tough start to the year for Indian markets. The outlook remains uncertain, with traders likely to keep a close watch on the upcoming earnings reports.