Indian Stock Market Plunges on January 13: Sensex Falls 844 Points, Nifty Drops 259

The Indian stock market witnessed a dramatic plunge on Monday, January 13, as both the Sensex and Nifty 50 experienced significant losses. The Sensex tumbled by 844 points, dropping below the 77,000 mark once again, while Nifty 50 saw a steep decline of 259 points, falling below the 23,200 levels. The market is currently facing intense pressure amid multiple economic challenges.

Sensex Plummets:

The Sensex shed a massive 843.67 points, reaching an intraday low of 76,535.24. At the time of writing, it was trading at 76,771.12, down by 607.79 points or 0.79%. The index opened at 76,629.90, a significant drop from last week's closing of 77,378.91. Among the few top gainers, Axis Bank, IndusInd Bank, TCS, and Infosys managed to stay afloat, while HCL Tech saw volatile trading ahead of its Q3 results.

The sell-off was widespread, with major stocks such as Zomato, Tata Steel, Tech Mahindra, Adani Ports, M&M, Asian Paints, Power Grid, HDFC Bank, Sun Pharma, Kotak Bank, ICICI Bank, Tata Motors, and ITC seeing declines ranging from 1% to 4.5%. Out of the 30 stocks on the Sensex, 25 saw losses, with only five advancing.

Nifty 50’s Black Monday:

Nifty 50 mirrored the bearish sentiment, losing 203.50 points or 0.87%, trading at 23,228 at the time of writing. The index hit an intraday low of 23,172.70, shedding 258.8 points. Out of the 50 scrips listed, 44 stocks were in the red, with only 5 advancing. The Bank Nifty fell by 1%, while the Nifty Midcap 100 and Nifty Smallcap 100 indexes dropped by more than 2.4% each. India’s volatility index surged by over 6%, hitting an intraday high of 6.11.

The sell-off extended across all indices, with the Nifty Realty index losing 4.2%, followed by the Nifty Consumer Durables Index (down by 2.8%), the Nifty Midsmall Healthcare Index (down by 2.13%), the Nifty Metal Index (down by 2.11%), and both the Nifty Media and Nifty Auto indices, which slipped by 1.6%.

Factors Behind the Market Decline:

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, explained that the market is under pressure due to a series of strong headwinds. The US jobs data for December showed a surge of 2.56 lakh job additions, far surpassing expectations of 1.65 lakh. This has led to reduced expectations of rate cuts in 2025, as the US economy appears to be robust enough to operate without stimulus, negatively impacting markets that had priced in multiple rate cuts this year.

Additionally, Brent crude oil prices above $81 per barrel pose a further challenge to market stability. While India's industrial production data for November showed a 5.2% increase, indicating recovery from the Q2 slowdown, the rising crude prices add inflationary pressure, affecting investor sentiment.

However, Dr. Vijayakumar highlighted that IT stocks have shown resilience despite the market downturn, and pharma and healthcare stocks remain stable due to sustained demand. The high US 10-year bond yield above 4.7% is expected to keep Foreign Institutional Investors (FIIs) selling, but it presents opportunities for long-term investors to pick up well-priced large-cap stocks, particularly in the banking sector. The broader market, however, remains under pressure.

Outlook for the Week:

Vinod Nair, Head of Research at Geojit Financial Services, pointed out that corporate earnings will be in the spotlight this week, with major companies, including IT giants, set to release their Q3 results. Macroeconomic data, such as India's inflation rate and industrial production figures, will also play a key role in determining the market’s direction. On the global front, updates from the US economy, especially labor market data and inflation trends, could influence FII flows. With crude oil prices continuing to rise, inflationary pressures are expected to persist, keeping market volatility high. Investors should remain cautious and responsive to a mix of earnings results, macroeconomic data, and global economic developments.

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