Indian stock markets opened on a weak note on December 13, mirroring the somber mood across global markets. The benchmark indices, Sensex and Nifty, both saw significant declines, driven by broad-based selling across sectors. Global concerns such as a stronger dollar, rising U.S. Treasury yields, and disappointing developments in the Chinese economy added to the pressure.
A Rough Start for the Markets
At 10:30 AM, the Sensex had tumbled by 1,023 points (1.3%), settling at 80,266. Meanwhile, the Nifty dropped 311 points (1.3%) to 24,237. Market breadth was heavily negative, with 2,493 stocks declining against just 740 advancing. Only 93 stocks managed to hold steady.
Metal stocks emerged as the biggest losers, down over 2% as uncertainty loomed over China’s stimulus measures. However, no sector was spared, as all 13 major indices posted losses.
What’s Dragging Markets Down?
The global market jitters stem from several factors:
- Stronger U.S. Dollar: The appreciating dollar is raising concerns about imported inflation in India.
- Rising U.S. Treasury Yields: Yields have seen their steepest weekly rise this year, dampening expectations of significant U.S. rate cuts in 2025.
- China’s Economic Woes: A high-level meeting in Beijing pledged support for debt and consumption, but markets were unimpressed. Adding to the tension is the possibility of renewed U.S.-China trade friction, especially with Donald Trump’s potential return to the White House.
Regional and Domestic Challenges
Asian markets were also under pressure, with China’s Shanghai Composite, Japan’s Nikkei 225, and Hong Kong’s Hang Seng indices falling between 1-2%.
Back home in India, concerns over foreign institutional investors (FIIs) selling persist. Over December 11 and 12, FIIs offloaded Indian equities worth ₹4,572 crore.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, pointed out that India’s high market valuations are making it an attractive profit-booking destination for FIIs. “With the appreciating dollar, FIIs are likely to sell more whenever the market rises,” he added.
The Road Ahead
The Indian market’s immediate future appears clouded by global and domestic challenges. Investors should brace for continued volatility as the global economy navigates through a complex mix of macroeconomic factors.
