Indian equity benchmark indices Sensex and Nifty extended their losing streak to a fifth consecutive session on Friday (December 20), closing with sharp declines of about 1.5 per cent amid global risk aversion and domestic concerns over high valuations and low earnings growth.
The 30-share BSE Sensex plummeted 1,176.46 points, or 1.49 per cent, to close at 78,041.59. The index fell as much as 1,343.46 points, or 1.69 per cent, to an intraday low of 77,874.59.
The broader NSE Nifty dropped 364.20 points, or 1.52%, to settle at 23,587.50.
This week’s market slump eroded Rs 18.5 lakh crore ($223 billion) in investor wealth, according to CNBC-TV18.
Among Sensex constituents, Tech Mahindra, IndusInd Bank, Axis Bank, Mahindra & Mahindra, Tata Motors, Larsen & Toubro, State Bank of India, Tata Consultancy Services, UltraTech Cement, and Reliance Industries saw significant losses. On the other hand, JSW Steel, Nestle, and Titan managed to post gains.
The downturn has been attributed to risk aversion in the global markets after the hawkish stance of the US Federal Reserve.
Although the Fed decided to keep rates lower, its projections indicated fewer rate cuts going forward
“Disappointment regarding the slower-than-anticipated rate cuts by the US Fed has adversely affected global market sentiment,” said Vinod Nair, Head of Research at Geojit Financial Services.
The global developments only added to the subdued sentiment in India, where the markets are grappling with high valuations and low earnings growth.
“This bearish outlook is particularly impacting the domestic market, which is already contending with high valuations & low earnings growth. The sell-off has been widespread, with significant declines in mid- and small-cap stocks, where valuations premiumisation is at historical peak. The IT sector is notably underperforming as it was amongst the best performers in anticipation of rapid rate cuts in 2025,” Nair said.
With inputs from agencies
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Bloodbath in Indian stock market: Sensex loses over 1500 from day’s high, Nifty cracks 360 points
