Sensex and Nifty indices have dipped into the red due to weak global cues. Banks and IT sectors are facing pressure, while RIL’s stocks have seen a decline
The benchmark indices Nifty and Sensex began the session on January 16 with a weak start, breaking a three-day winning streak due to weak global cues. Despite recent sessions showing a boost in investor sentiment following lower-than-expected US inflation figures for December, the upward trend in global markets eventually gave way to profit-taking. Additionally, a series of high-profile quarterly earnings reports also influenced trading in the domestic market.
The sharp decline in banking and information technology stocks dragged both benchmarks into negative territory, but gains in the index heavyweight Reliance Industries helped limit the losses to some extent.
As of 10:03 am, the Sensex was down 363.79 points or 0.47 percent at 76,679.03, and the Nifty was down 90.15 points or 0.39 percent at 23,221.65. Of the shares traded, 1,830 rose, 1,240 fell, and 119 remained unchanged.
Despite expectations of a relief rally in the domestic market after a challenging start to 2025, it was unlikely to significantly impact the underlying market sentiment. Ongoing concerns about a slowdown in earnings growth, which are being discussed in the current Q3 earnings season, have led investors to adopt a sell-on-rise strategy.
Furthermore, the continuous departure of foreign institutional investors has made the market more fragile. According to VK Vijayakumar of Geojit Financial Services, even a declining dollar index and US bond yields are not enough to stop the sustained selling by FIIs. Therefore, any substantial market recovery is likely to be met with selling pressure, he noted.
In today’s trading session, Infosys shares plummeted over 5 percent, making it the worst performer on the Nifty 50 index. Despite beating market estimates with its October-December earnings, Infosys revised its revenue growth guidance, signaling a potentially weaker Q4, which likely led to the decline.
Following Infosys, Axis Bank also experienced a significant drop of nearly 5 percent due to disappointing Q3 numbers. The bank reported higher slippages and slower deposit growth, prompting analysts to lower their target prices for the stock. Axis Bank’s management foresees subdued deposit and credit growth until FY26, reflecting the challenging economic conditions.
On a positive note, Reliance Industries saw a surge of almost 3 percent, providing some relief to the market indices. The increase in RIL’s shares was driven by better-than-expected Q3 results and optimism for improved performance after a period of sluggishness.
In the broader market, mid-smallcap indices declined by 0.2 percent and 0.3 percent, respectively, while some sectors showed positive trends with gains of 1.6 and 1.5 percent.
Sectoral indices displayed mixed performance today, with Nifty IT suffering the most significant losses, dropping over 2 percent due to declines in Infosys, TCS, Wipro, and HCLTech. The Nifty Bank index also fell by over 1 percent, with Axis Bank, ICICI Bank, and Kotak Mahindra Bank in the red.
Conversely, sectors like Nifty Energy, Nifty Metals, and Nifty Infra each rose by nearly 1 percent, benefiting from a weakening dollar index.
The upcoming week holds significant importance for investors, as bulls must overcome the immediate obstacle at 23,471 to initiate an upward trend. Failure to surpass this level and ideally breach 23,820 on a daily basis in the coming sessions could indicate that the recent market rebound was driven by short-covering rather than substantial investment, according to Akshay Chinchalkar, Head of Research at Axis Securities.
Among the major gainers on the Nifty were Reliance Industries, Hindalco, BPCL, and Coal India, while Infosys, Axis Bank, TCS, HCLTech, and Wipro experienced declines.
Please note that Moneycontrol is a part of the Network18 group, which is overseen by the Independent Media Trust, with Reliance Industries as the sole beneficiary.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.