Sensex drops 600 pts to 79,350; IT, Pharma, Health, financials drag most

Benchmark Indian equity indices BSE Sensex and Nifty50 were trading lower on Friday, amid mixed global cues and a lower close on Wall Street overnight.

At 10 AM, the BSE Sensex was lower by 480 points, or 0.60 per cent, at 79,463, while the Nifty50 was at 24,065.40, down 123 points, or 0.51 per cent.

After the opening bell, more than half the stocks were trading lower, with losses led by TCS (down 0.71 per cent), followed by ITC, Infosys, Asian Paint, and Kotak Mahindra Bank, while gains were led by HCLTech (up 1.04 per cent), followed by SBI, Adani Ports & SEZ, Maruti Suzuki India, and Mahindra & Mahindra.

On the Nifty50, 27 out of the 50 stocks were trading higher, with gains led by ONGC (up 3.14 per cent), followed by SBI, HCLTech, IndusInd Bank, and SI Life, while losses were led by Hero MotoCo (down 2.07 per cent), followed by TCS, Infosys, Wipro, and Cipla.

Across sectors, the IT (down 0.47 per cent), followed by Healthcare, Pharma, Private Bank, and FMCG indices were under pressure, while the frontline financial sector indices were also muted. On the upside, the Media index was the top gianer, climbing 1.68 per cent, followed by the PSU Bank index, which was higher by 1.31 per cent.

Other sectoral gainers included Oil & Gas, Realty, Consumer Durables, Metal and Auto indices.

In the broader markets, the Nifty Midcap 100 was ahead by 0.36 per cent and the Nifty Smallcap 100 was higher by 0.55 per cent.

While markets in India had climbed nearly 2 per cent on the second day of the new calander year 2025 to extend gains from the previous session, Wall Street’s benchmark indices declined on coming back from the New Year’s Day break. Markets in India rallied on the back of renewed hopes of a better earnings season, coupled with a broadbased rally led by gains in auto, IT and financial stocks. Moreover, foreign institutional investors net bought Indian equities worth Rs 1,506.75 crore on Thursday, while domestic ones net bought shares worth Rs 22.14 crore, adding to the positive momentum. READ MORE

In contrast, adding a word of caution to the subdued sentiment is Axis Mutual Fund, which has said in its outlook for 2025 that significant valuation expansion seems unlikely in 2025 amid near-term growth challenges, likely muted inflows from foreign institutional investors (FIIs), and subdued earnings expectations. It asserted that it will be a year of stock picking across marketcaps. READ MORE

In other news, India’s manufacturing sector growth slipped to a 12-month low in December, as fresh business orders and production expanded at softer rates, according to a monthly survey released on Thursday. The HSBC India Manufacturing Purchasing Managers’ Index (PMI) compiled by S&P Global slipped to 56.4 in December from 56.5 in November, indicating a weaker improvement in operating conditions. In January 2024, the figure stood at 56.5.

In the primary markets, meanwhile, fifteen companies have launched their initial public offerings (IPOs) in December 2024, making it the best month for public offerings since 1996. Collectively, they have raised Rs 25,425 crore, which also made December the best month in terms of the quantum of funds raised. In December 1996, 33 companies had raised Rs 931 crore.

Today, in the primary markets, the basis of allotment for Indo Farm Equipment Limited IPO in the mainline section and Technichem Organics Limited IPO in the SME section will get finalised, while Citichem India Limited IPO from the SME section will list on the bourses.

Further, in the SME section, Leo Dry Fruits and Spices Trading Ltd IPO will enter its last day of subscription, and Davin Sons Retail Limited IPO and Davin Sons Retail Limited IPO will enter their second day of subscription, while Fabtech Technologies Cleanrooms Limited IPO will open for subscription today.

Separately, subprime borrowers are primarily taking on consumption loans, while those better off are leveraging to buy assets, suggesting a K-shaped credit market in India, said Nomura in a report on Thursday. READ MORE

Elsewhere, the rupee further weakened against the dollar on Thursday and hit another record closing low of Rs 85.76 compared to its previous close of Rs 85.65. The Reserve Bank of India (RBI) intervened to sell dollars at Rs 85.78 levels which pulled down the Indian currency to Rs 85.67 during afternoon trade. The rupee, however, weakened again to close at a new low.

Meanwhile, markets in the Asia-Pacific region were mixed on Friday. Hong Kong’s Hang Seng index rose 0.16 per cent, while mainland China’s benchmark CSI 300 index declined 0.63 per cent. The Shanghai Composite was lower by 0.54 per cent. The People’s Bank of China is reportedly planning to cut interest rates “at an appropriate time” this year, the Financial Times reported citing comments from the central bank. The country’s 7-day reverse repo rate is currently set at 1.5 per cent.

Separately, China’s commerce ministry plans to impose export restrictions on certain technology used to make battery components and for processing critical minerals like lithium and gallium, according to a notice issued on Thursday.

South Korea’s Kospi index was up 1.81 per cent and the small-cap Kosdaq climbed 1.70 per cent. Australia’s S&P/ASX 200 was ahead by 0.50 per cent. Japan markets remain closed for a holiday.

Global stocks had fallen on Thursday as early gains faded, while the dollar hit a two-year high after economic data indicated the US labor market remained on solid ground.

On Wall Street, US stocks closed broadly lower after initial gains failed to hold, with the S&P 500 and Nasdaq notching their fifth straight daily decline, the longest skid since April.

The US Labor Department reported that the number of Americans filing new applications for unemployment benefits dropped to an eight-month low of 211,000 last week, below the 222,000 estimate of economists polled by Reuters.

The Dow Jones Industrial Average fell 151.95 points, or 0.36 per cent, to 42,392.27, the S&P 500 fell 13.08 points, or 0.22 per cent, to 5,868.55 and the Nasdaq Composite dipped 30.00 points, or 0.16 per cent, to 19,280.79.

European stocks closed higher after a sluggish start to the session, buoyed by a jump in energy names.

MSCI’s gauge of stocks across the globe lost 1.72 points, or 0.20 per cent, to 839.70. Europe’s STOXX 600 index gained 0.6 per cent.

The dollar jumped to a two-year high on Thursday, building on the strong gains from 2024 as expectations remained intact that economic growth in the US will outpace that of its peers, keeping the Federal Reserve on a slower interest rate-cut path.

The dollar index, which measures the greenback against a basket of currencies, rose 0.67 per cent to 109.27, after climbing to 109.54, its highest since Nov. 10, 2022.

Stocks had stumbled heading in to the end of the year, denting a year-long rally fueled by growth expectations surrounding artificial intelligence, anticipated rate cuts from the Federal Reserve, and more recently, the likelihood of deregulation policies from the incoming Trump administration.

However, the recent economic forecast from the Fed, along with worries that President-elect Donald Trump’s policies such as tariffs may prove to be inflationary, has sent yields higher and created a stumbling block for equities.

The yield on benchmark US 10-year notes slipped 1.6 basis points to 4.563 per cent, but remained above the 4.5 per cent mark that analysts see as a problematic level for stocks.

Oil prices advanced, with US crude settling up 1.97 per cent at $73.13 a barrel and Brent climbing to settle at $75.93 per barrel, up 1.73 per cent, on optimism over China’s economy and fuel demand after a pledge by President Xi Jinping to promote growth.