Indian benchmark indices Sensex and Nifty50 plunged in trade on Friday, January 17, 2025. The BSE Sensex slumped 780 points or 1 per cent and logged an intraday low at 76,263.29. Likewise, the National Stock Exchange (NSE) Nifty tanked 211.45 points or 0.9 per cent to the day's low at 23,601.5. In the afternoon, at around 1:30 PM, on the 30-stock BSE Sensex index, half the stocks were trading higher while the rest declined. Gains were led by Zomato (up 2.58 per cent), followed by Reliance Industries (up 2.39 per cent), Power Grid Corp., Nestle India, and Tata Steel, while losses were capped by Infosys (down 5.63 per cent), followed by Axis Bank, Kotak Mahindra Bank, ICICI Bank, and Mahindra & Mahindra.
Across sectors, the Nifty IT index was the top drag, falling 2.46 per cent, followed by the Private Bank index, which was lower by 2.13 per cent. The Nifty Bank and Financial Services were lower by 1.4 per cent and 1.39 per cent, respectively, while the Auto, Media, and PSU Bank indices were also lower.
Here are a few reasons why the market is on a downward trajectory today:
Weakness in IT and bank stocks
Information technology (IT) stocks were under pressure, with the Nifty IT index falling 3 per cent on the National Stock Exchange (NSE) in Friday’s intraday trade after Infosys and LTIMindtree tanked in trade.
Also Read
Infosys, top loser on Nifty IT, shares slipped 5.8 per cent and recorded an intraday low of 1,812.7 per share and LTIMindtree shares slipped 3.4 per cent, logging an intraday low at Rs 5771.1 per share on BSE.
Post Infosys Q3 results, its American Depository Receipts (ADRs), listed on the New York Stock Exchange (NYSE) plunged 6 per cent after the firm revised its revenue guidance to 4.5-5 percent in constant currency terms for FY25. The revision as per analysts suggested a weaker performance by the company in Q4.
Besides, Nifty Bank index slipped nearly 2 per cent dragged by Axis Bank which was down 6 per cent intraday.
The weakness in Axis Bank came after the bank posted its Q3 results and brokerages cut targets on Axis Bank for the next one year. Axis Bank reported fresh slippages of Rs 5,432 crore for Q3FY25, up 46 per cent year-on-year (Y-o-Y) and 22.25 per cent quarter-on- quarter (Q-o-Q). This included Rs 4,923 crore from the retail portfolio; Rs 215 crore from SME (small and medium enterprise) business; and Rs 294 crore from wholesale business.
Delay in Israel's ceasefire voting
Israeli Prime Minister Benjamin Netanyahu has delayed a cabinet vote to approve the Gaza ceasefire deal, due on Thursday, accusing Hamas of seeking last-minute changes to the agreement, as per reports.
US Secretary of State Antony Blinken said a "loose end" was being tied up and that he was confident the ceasefire would still begin on Sunday as planned.
US President-elect Donald Trump will take office on January 20, 2025. As per Chokkalingam, Trump's entry into the White House is concerning due to his punitive US tariffs plan on many countries.
Trump has threatened to slap tariffs of at least 10 per cent on goods from China and to impose levies of 25 per cent on products from both Mexico and Canada, prompting importers like Reynolds to import early to avoid higher costs that are often passed on to consumers, as per reports.
Weakness most global markets
Asia-Pacific markets traded mixed with Japan's Nikkei down 0.37 per cent, Hong Kong's Hang Seng up 0.31 per cent, China's mainland CSI 300 up 0.33 per cent, and Shanghai up 0.22 per cent.
Wall Street on Thursday closed on a lower note after economic data on Thursday indicated consumer spending remained strong, while the labor market is also on solid footing, giving the Fed room to maintain a slow pace in cutting interest rates this year.
At close, Dow Jones was down 0.16 per cent, and S&P 500 was down 0.21 per cent, and Nasdaq was down 0.89 per cent.
FII selling
Foreign Institutional Investors (FIIs) sold a net worth of Rs 4,341.95 crore in Indian equities on January 16, 2024. Meanwhile, in January 2025, FIIs withdrew Rs 40,055 crore so far as per data by NSDL.
Chokkalingam believes FIIs would wait for Budget outcomes before making any significant decisions.
Rupee depreciation
On Friday, the Indian rupee was marginally weaker as the impact of heightened dollar demand, spurred by the maturity of positions in the non-deliverable forwards market, was blunted by likely intervention by the Reserve Bank of India (RBI), as per a Reuters report.
The rupee was at 86.5850 against the US dollar, down slightly from its close at 86.55 in the previous session.
"Rupee depreciation of the Indian Rupee against the US dollar is raising worries among the investors," said G Chokkalingam, Founder, Equinomics Research Pvt Ltd.
Technical view
"This week, Nifty has been trading within the 23,000-23,400 range. On January 14, 2025, it formed a Bullish Harami pattern near the lower Bollinger Band, indicating potential stabilisation around 23,000. This suggests caution as the market awaits a decisive breakout for directional clarity," said Jigar S Patel, senior manager - technical research analyst, Anand Rathi Shares and Stock Brokers.
Patel added: A strong close above 23,400 could signal further upside toward 23800, while a close below 23,000 might push Nifty down to 22,800 support. For now, it’s prudent to adopt a wait-and-watch approach until Nifty confirms its next move beyond these critical levels.