The Indian stock market extended its losing streak for the fourth consecutive trading session on Tuesday, December 31, 2024, weighed down by persistent selling from foreign institutional investors and subdued activity in a holiday-shortened week. The benchmark indices closed in the red, with the Sensex slipping below key psychological levels.
Market Ends Lower Amid Sustained Foreign Selling
The 30-share BSE Sensex declined by 168.66 points, or 0.20 per cent, to settle at 85,995.44. During the trading day, the index swung between a high of 86,285.86 and a low of 85,776.51. The broader NSE Nifty50 mirrored the weakness, dropping 38.00 points, or 0.15 per cent, to close at 25,995.60. This marked a significant breach of the 26,000-point support level for the 50-stock index.
The primary driver behind the extended decline was continued selling pressure from Foreign Institutional Investors (FIIs). Provisional data from the exchanges showed that FIIs offloaded shares worth a net Rs 1,057.18 crore on Tuesday. This trend of foreign capital exiting the Indian equity market has been a major overhang on sentiment in recent sessions.
Mixed Sectoral Performance and Key Stock Movers
The market breadth presented a mixed picture. While the benchmark indices fell, the broader market showed some resilience. The BSE midcap gauge managed to eke out a marginal gain of 0.04 per cent, and the smallcap index rose by 0.27 per cent.
Performance across sectors was uneven. Major laggards included banking and financial stocks. The Nifty Bank index fell by 0.43 per cent, while the Financial Services index dropped 0.35 per cent. Metal and Pharma indices also ended lower. On the gaining side, the Realty and Oil & Gas sectors managed to close in positive territory.
Among the Sensex constituents, Mahindra & Mahindra (M&M) was the top loser, shedding over 2 per cent. Other significant decliners included Axis Bank, State Bank of India (SBI), and ICICI Bank. On the flip side, NTPC emerged as the biggest gainer, rising nearly 2 per cent. Power Grid Corporation and Larsen & Toubro (L&T) also closed higher, providing some support to the index.
Thin Trading and Year-End Factors Influence Sentiment
Market analysts pointed out that trading volumes remained thin, which is typical for the final week of the calendar year. Many global investors and funds are on holiday, leading to reduced liquidity and exaggerated moves in stock prices. The lack of fresh positive triggers domestically or globally also kept buyers on the sidelines.
"The market is witnessing a phase of consolidation and profit-booking after a strong rally earlier in the year," noted a market expert. "The outflow from foreign funds is adding to the pressure, while domestic institutional investors (DIIs) have been providing some cushion." Indeed, DIIs were net buyers to the tune of Rs 1,053.79 crore, nearly offsetting the FII selling for the day.
Looking ahead, investors are likely to remain cautious in the near term. The focus will shift to upcoming corporate earnings for the third quarter of the fiscal year, global economic data, and any changes in the monetary policy stance of major central banks. The breach of the Nifty's 26,000 level is seen as a technically negative signal, and the index may need to find a new base of support before attempting a recovery.
