Indian equity markets fell sharply on December 17, 2024, with the BSE Sensex falling 1,015.64 points, or 1.2 per cent, and the NSE Nifty falling 284 points below 24,400. Weak global cues, falling rupee and subdued investor sentiment led to heavy selling in key sectors like finance, metals, FMCG and IT stocks.
US Federal Reserve and global market turmoil
Pressure continued in global markets, leading to a decline in Indian stock markets. Investor caution ahead of the US Federal Reserve’s upcoming interest rate decision further worsened the situation. Uncertainty over future interest rate hike and Fed’s stance on global economic trends kept investors worried, which weighed on the performance of the Indian market.
Rupee at record low
The rupee weakened further, hitting an all-time low of 84.92 against the US dollar, mainly due to outflows from foreign institutional investors (FIIs) and widening trade deficit. The record trade deficit in November, mainly due to increased gold imports, contributed to this decline in the value of the rupee, raising concerns over the country’s economic stability.
Market sentiment affected by FII withdrawal
Foreign institutional investors (FIIs) continued their selling and pulled out a net sum of Rs 279 crore on December 16. Market sentiment remained weak due to lack of fresh buying activity and persistent global uncertainties. Absence of positive signals from FIIs added pressure on Indian indices.
Regional impact and heavy selling
Heavy selling pressure was seen in key sectors including finance, FMCG and IT. Blue-chip stocks like Reliance Industries, Bharti Airtel, HDFC Bank and Titan were the biggest laggards, leading to a sharp decline in the indices.
Market outlook remains cautious
The outlook for Indian markets remains cautious due to global uncertainties, weak rupee and continued FII withdrawals.
