Nifty, Sensex slide nearly 0.9% in early trade; experts predict easing pessimism after January 15

Indian stock markets opened in the red on Monday, with the Nifty 50 and BSE Sensex extending their downward trajectory amid a bearish global outlook.

The Nifty 50 index dropped over 1% or 236.10 points to start at 23,195.40, while the BSE Sensex fell by 749.01 points or 0.97%, opening at 76,629.90. This sharp decline reflects persistent pressure on global equities, fueled by a strengthening US Dollar, rising global bond yields, and uncertainty surrounding potential policy changes under Trump 2.0.

Market analysts expect the pessimism to subside after January 15, driven by anticipated strong US corporate earnings. Ajay Bagga, Banking and Market Expert, said, “The FPI short positions are nearing the level at which Indian markets have bottomed in the past. While this is encouraging, it’s not definitive. Monday’s session reflects the negative sentiment following the US market slump on Friday. Rising global yields and inflation concerns are adding to the challenges.”

He added, “Despite these headwinds, we remain optimistic that markets will adapt to the evolving data and regain momentum in the coming weeks.”

Sectorally, all major NSE indices opened in the red, with Nifty FMCG and Nifty Consumer Durables losing over 1% in early trade. Nifty IT declined by 0.5%, while Nifty Bank and Nifty Auto dropped by 0.9%. Among the Nifty 50 stocks, 49 registered losses, with IndusInd Bank as the sole gainer. Key losers included BPCL, BEL, Power Grid, NTPC, and Trent.

Akshay Chinchalkar, Head of Research at Axis Securities, highlighted key technical levels, saying, “The area between 23,177 and 23,355 will be critical on the downside, with immediate resistance at 23,600. Despite 34% of Nifty stocks trading above their 200-day average, the 14-day momentum isn’t oversold yet, indicating potential for further weakness.”

Global factors are also weighing heavily on sentiment. Rising inflation, debt levels, and higher oil prices, exacerbated by sanctions on Russian entities by the outgoing Biden administration, have created a challenging environment. The focus now shifts to whether strong US corporate earnings can reverse the prevailing negative outlook or if a prolonged downturn lies ahead.

Meanwhile, Asian markets mirrored the bearish sentiment. Taiwan Weighted fell over 2%, South Korea’s KOSPI dropped 1.18%, and Hong Kong’s Hang Seng declined by 1.32%. Japan’s Nikkei remained closed for a holiday.

(Inputs from ANI)