India’s stock market fell in early trade today as investors navigated persistent foreign outflows and a depreciating rupee, while an India-US trade deal was elusive.
At 10:15 am, the 30-share BSE Sensex was down 0.55% or 470.99 points at 84,739.75 points, even as the broader Nifty 50 fell 0.50% to 25,896.80 points. The rupee hit a fresh all-time low against the dollar, extending its recent slide. Fifteen of the 16 major sectors traded lower. Small-caps and mid-caps lost 0.6% and 0.4%, respectively.
- Top gainers: Bharti Airtel Ltd., Asian Paints Ltd., Tata Motors PV Ltd., Titan Ltd.
- Top losers: Eternal Ltd., Axis Bank Ltd., HCL Technologies Ltd., Infosys Ltd., Tata Steel Ltd., Bharat Electronics Ltd.
The Sensex and Nifty 50, which hit record highs on 1 December, have been on shaky ground since due to lack of major triggers and prolonged wait for an India-US trade deal.
Why is stock market falling today?
There are several factors:
- An elusive India-US trade deal: Hopes for an agreement before the year end appear to be dimming. On Monday, India’s trade secretary said that the two countries were close to a “framework deal”, without giving any timeline. Last week, India’s chief economic adviser said that a trade deal is likely only by March.
- US jobs data: This week’s US jobs data could be more important for India’s stock market than the interest-rate cut by the US Federal Reserve last week, according to Vikram Kasat, head advisory at PL Capital. Lower interest rates in the US make emerging markets such as India more attractive to foreign investors.
- FII outflows: Foreign institutional investors sold shares worth shares worth ₹1,468 crore on Monday, marking their seventh consecutive session of selling, provisional data showed. So far in December, FIIs have withdrawn $1.6 billion from Indian equities, reversing $1.3 billion of inflows over the prior two months. They have also pulled money from local debt.
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“The strong participation from domestic institutional investors and retail flows continue to provide a cushion against deeper downside risks,” Ponmudi R, chief executive officer at online trading firm Enrich Money, told PTI. “Against this backdrop, markets are expected to respect key technical levels rather than exhibit aggressive trending behaviour.”