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Indian benchmark indices, the BSE Sensex and Nifty 50, opened slightly higher on Monday, buoyed by positive cues from Wall Street.
Sensex, Nifty Today
Following the Indian government’s confirmation of two cases of Human Metapneumovirus (HMPV) in Karnataka, coupled with reports of a virus outbreak causing widespread disruption in China, stock market investors opted for caution. This resulted in a sharp decline, with the BSE Sensex plunging over 1,100 points and the Nifty dropping around 1.4%.
The fear gauge, India VIX, spiked 13%, reflecting heightened uncertainty as a broad sell-off impacted mid and small-cap stocks, along with various sectors. The Sensex hit a low of 78,065, down over 1,100 points, while the Nifty fell to near the 23,600 mark.
Following the market open, more than half of the 30 stocks on the BSE Sensex were in the red. Titan led the gainers with a 1.74% rise, followed by Bajaj Finance, Bajaj Finserv, Infosys, and Mahindra & Mahindra. On the downside, Kotak Mahindra Bank was down by 1.45%, with Tata Steel, IndusInd Bank, Power Grid Corp., and NTPC also seeing losses.
On the Nifty 50, 31 stocks were in positive territory, while the remaining stocks faced declines. Titan was the top gainer, up 2.10%, followed by Bajaj Finance, Bajaj Finserv, Mahindra & Mahindra, and Bajaj Auto. The biggest losses were seen in Kotak Mahindra Bank (down 1.25%), Tata Steel, BPCL, Power Grid Corp., and IndusInd Bank.
Sectorally, the Nifty IT and Consumer Durables indices were the top performers, rising by 1.05% and 1%, respectively. Other sectors showing gains included Auto, Financial Services, and Realty. On the other hand, the PSU Bank index was the biggest laggard, falling 1.5%, followed by declines in the Bank Nifty, FMCG, Media, Metal, Pharma, Private Bank, Healthcare, and Oil & Gas indices.
In the broader market, the Nifty Midcap 100 was down 0.10%, while the Nifty Smallcap 100 fell by 0.29%.
India’s volatility gauge, the India VIX, rose by 5.28% to 14.26, indicating increased market uncertainty.
Global Cues
Asian markets started cautiously on Monday as investors braced for a week packed with economic data that is expected to highlight the relative outperformance of the United States and continue to support the dollar’s ongoing bullish trend.
The key event in the US this week is the December payrolls report, due on Friday, with analysts predicting a 150,000 increase in jobs and an unemployment rate holding steady at 4.2%. This will be preceded by data on ADP hiring, job openings, and weekly jobless claims, as well as surveys on manufacturing, services, and consumer sentiment. Positive data could reinforce expectations for fewer rate cuts from the Federal Reserve, with markets currently expecting only a 40 basis point reduction for 2025.
On Wednesday, the minutes from the Fed’s latest meeting will provide further insight into their future interest rate projections, and at least seven key policymakers, including influential Fed Governor Christopher Waller, are scheduled to speak.
Inflation data from the EU and Germany this week will offer further clarity on potential rate cuts by the European Central Bank, while China’s consumer price report on Thursday is expected to support the case for additional stimulus in the region.
Given the numerous upcoming events, investors remained cautious, and MSCI’s broadest index of Asia-Pacific shares outside Japan edged up by 0.1%.
Among Asian markets, Japan’s Nikkei declined by 1.05%, while South Korea’s Kospi gained 1.12%, amid ongoing political uncertainty. Australia’s ASX 200 advanced by 0.12%, and Hong Kong’s Hang Seng index rose by 0.45%. In mainland China, the CSI 300 dipped by 0.06%, and the Shanghai Composite fell by 0.05%.
Futures for the S&P 500 and Nasdaq were slightly higher in early trade.
Goldman Sachs analysts pointed out that the S&P 500 delivered a total return of 25% in 2024, marking its second consecutive year of gains over 20%. While the rally was concentrated in just five stocks, Goldman expects an additional 11% rise in 2025, driven by a similar increase in earnings. The new earnings season begins on January 15.
The US bond market has faced challenges, with 10-year yields inching up to 4.631%, nearing last week’s eight-month high of 4.641%. This week, investor sentiment will be tested by the sale of $119 billion in new three-, 10-, and 30-year Treasuries.
The climb in yields helped push the dollar index up to 108.950, after rising nearly 0.9% last week to a peak of 109.540. The strong dollar continues to weigh on gold prices, holding the metal at $2,641 per ounce.
Oil prices received support from colder weather in Europe and the US, with a winter storm bringing snow, ice, and freezing temperatures to large areas of the US on Sunday. Brent crude rose by 19 cents to $76.70 per barrel, while US crude added 27 cents, reaching $74.23 per barrel.
