Indian Stock Market on 17.12.24

Indian equity markets continued their downward trajectory on Tuesday, December 17, with major indices Sensex and Nifty50 both experiencing significant losses. The Sensex dropped 1,064.12 points to 80,684.45, and Nifty lost 348 points, settling at 24,320.30. In intraday trading, both indices hit lows, with Sensex shedding 1.4% and Nifty falling by 1.5%.

There are strong concerns over FII selling speculation around China’s potential increase in its budget deficit in 2025 is causing fears of a slowdown in foreign institutional inflows (FIIs) into Indian markets. Though still speculative, this has added pressure on the market, particularly after FIIs turned net buyers following months of selling.

Also investors are awaiting the outcome of the U.S. Federal Reserve’s meeting, where a quarter-point rate cut is expected. However, uncertainty around the Fed’s rate strategy for 2025 persists and it set global markets were also under pressure. Asian stocks showed mixed performance, with Japan’s Nikkei dropping 0.2%, and South Korea’s Kospi falling 1.3%. Global uncertainty, particularly surrounding central bank decisions, contributed to a risk-off sentiment, with European stocks also facing declines. The rise in the VIX index, signaling increased volatility, suggests that Indian markets may continue to consolidate with potential for further downside.

Despite these signals ICICI Direct has forecast a significant upside for India’s Nifty index, with a target of 28,800 by 2025, signaling an 18% jump from its recent close of 24,336. The brokerage firm’s optimistic outlook is grounded in strong technical charts and historical trends, particularly the positive performance of the index following elections.

The Indian rupee is trading at 84.89 against the US dollar. While exporters like IT and pharmaceuticals may benefit from a weaker rupee, the increased cost of imports could negatively affect companies in sectors such as oil and gas.

Gold prices fell by 0.5%, at Rs 76,670 per 10 grams, while silver down 0.9% at Rs 90,333 per kilogram.

In the commodities space, oil prices softened, with U.S. WTI crude falling to $70.04 and Brent to $73.34 per barrel.