Indian Stock Markets Decline Amid Global Uncertainty and Domestic Challenges
Indian Stock Markets Face Decline
On January 24, Indian stock indices experienced a decline, marking weekly losses. Various sectors such as auto, media, pharma, PSU Bank, realty, healthcare, oil, and gas saw significant drops. The Sensex closed at 76,190.46 points, down by 329.92 points or 0.43%, while the Nifty ended at 23,092.20 points, a decrease of 113.15 points or 0.49%.
Market Volatility and Influences
The Indian markets are currently volatile due to uncertainties surrounding US President Donald Trump's policies, which could disrupt global trade. Additionally, weak domestic economic growth and foreign portfolio investor sell-offs are impacting the stock markets.
Past Market Performance
In 2024, Sensex and Nifty grew by about 9-10%, while in 2023, they gained 16-17%. However, in 2022, the growth was only 3%. Factors like weak GDP growth, foreign fund outflows, rising food prices, and slow consumption have deterred investors in 2024.
Expert Insights
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that foreign institutional investors (FIIs) continue to sell, affecting large-cap stocks like banking. He mentioned that the market's current irrationality, with low valuations for large-caps and high valuations in the broader market, will eventually correct.
Shrikant Chouhan, Head of Equity Research at Kotak Securities, highlighted that global events, the upcoming Union Budget, RBI policy, and the ongoing Q3FY25 season will influence market movements. He observed that the broader market, including midcap and smallcap indices, underperformed, while the BSE IT index showed strength.
Looking Ahead
Market participants are closely watching the Budget 2025 and major announcements for future market directions.
Doubts Revealed
Sensex and Nifty
Sensex and Nifty are the two main stock market indices in India. They show how the stock market is doing by tracking the performance of the top companies listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) respectively.
Global uncertainties
Global uncertainties refer to unpredictable events or situations around the world that can affect economies, like political changes, wars, or economic policies in big countries like the USA.
Domestic challenges
Domestic challenges are problems or issues within India that can affect its economy, such as slow economic growth, inflation, or changes in government policies.
Foreign institutional investors
Foreign institutional investors are organizations or people from other countries who invest large amounts of money in Indian stocks. Their buying or selling can greatly impact the stock market.
Union Budget
The Union Budget is a financial plan presented by the Indian government every year. It outlines the government's revenue and expenditure for the upcoming year and can influence economic activities and markets.
RBI policy
RBI policy refers to the rules and guidelines set by the Reserve Bank of India, which is India's central bank. These policies can affect interest rates, inflation, and overall economic stability.
BSE IT index
The BSE IT index is a part of the Bombay Stock Exchange that tracks the performance of information technology companies. It shows how well IT companies are doing in the stock market.
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