Sensex Plunges 800 Points, Nifty Sheds 1% Amid Global Weakness

The benchmark indices, Nifty and Sensex, started the week on a cautious note, weighed down by substantial losses in PSU banks and real estate stocks. A gap-down opening resulted in all sectors trading in negative territory as domestic and global concerns continued to dampen investor sentiment.

Global market cues further contributed to the subdued mood, with Asia-Pacific markets opening lower following Friday's U.S. jobs report, which dashed hopes of an early interest rate cut by the Federal Reserve. U.S. markets also recorded consecutive weekly declines, adding to the downward pressure. Additionally, the dollar index surged to its highest level since 2022, exacerbating stress on the Indian rupee, which hit a record low of ₹86.18 against the dollar.

At approximately 9:20 am, the Sensex had dropped 798.34 points (1.03%) to 76,580.57, while the Nifty was down 246.35 points (1.05%) at 23,185.15. Market breadth remained weak, with 737 stocks advancing, 1,941 declining, and 172 remaining unchanged.

Ajit Mishra, Senior Vice President at Religare Broking, remarked, “The market remains under pressure, with even minor recovery attempts facing selling interest. As earnings season begins, volatility could increase.” He advised traders to be cautious, using market rebounds as opportunities for short positions, with a strong emphasis on risk management.

Mishra also noted that while stock-specific opportunities may emerge during earnings announcements, sectors such as IT, FMCG, and select pharma stocks appeared relatively stable, whereas broader markets and other sectors could continue facing headwinds.

In the broader market, mid-cap and small-cap indices mirrored the weak sentiment, posting losses of 1% and 0.8%, respectively. Analysts are closely monitoring earnings in this segment, as valuations remain mixed—some stocks presenting attractive opportunities, while others appear overpriced. Notably, mid- and small-cap indices had outperformed significantly in 2024, with gains of over 20%, compared to the Nifty's 9% rise during the same period.

All sectoral indices ended in negative territory, with most logging losses close to 1%. The Nifty Realty index fell over 2%, making it the worst-performing sector, while the Nifty PSU Bank index declined 1.5%, marking its fourth consecutive day of losses amid weak Q3 updates from certain banks. Metal stocks also faced selling pressure, led by Tata Steel, JSW Steel, and Vedanta. The Nifty Auto, FMCG, and Bank indices slid by 0.7% to 1%, while the Nifty IT index performed relatively better, dipping only 0.4%.

Key Stock Movements

DMart shares saw a decline of over 2% after brokerages downgraded their ratings and reduced target prices, citing a weak earnings performance for the December 2024 quarter. Avenue Supermarts posted a 4.9% rise in consolidated net profit at ₹723.54 crore for the quarter, compared to ₹690 crore in the same period last year.

Biocon shares gained over 3% after the U.S. Food and Drug Administration cleared Biocon Biologics' insulin facility in Malaysia, addressing a critical bottleneck. The regulator categorized the facility under "Voluntary Action Indicated" (VAI), allowing the company to proceed with product filings.

Waaree Energies shares rose 2% following its agreement to acquire a 100% stake in Enel Green Power India for ₹792 crore. Enel Green Power Development, a major renewable energy company in Europe, owns the Indian unit.

Support and Resistance Levels

Hardik Matali, Derivative Analyst at Choice Broking, commented, “After a negative start, Nifty may find support at 23,200, with additional levels at 23,000 and 22,800. On the upside, resistance could be seen at 23,500, followed by 23,600 and 23,800.” He also noted that the Bank Nifty index may find support at 48,400, 47,900, and 47,500, while key resistance levels are at 48,800, 49,400, and 50,000.

Top Gainers and Losers

Among the Nifty gainers were IndusInd Bank, Shriram Finance, HCL Tech, Maruti Suzuki, and Britannia Industries. On the other hand, BPCL, Apollo Hospital, M&M, SBI Life Insurance, and Bharat Electronics were the top laggards.