Investors Embrace Multi-Asset Approach During Turbulent Week in Indian Stock Markets
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New Delhi, Jan 4 (NationPress) The Indian stock markets faced significant fluctuations this week as investors gravitated towards a multi-asset approach in the wake of geopolitical uncertainties, particularly with Donald Trump’s anticipated return as the 47th US President.
The domestic benchmark indices wrapped up the week on a negative note, driven by a prevailing sell-on-rally sentiment due to a robust US dollar and elevated valuations, as noted by market analysts.
Following a strong rebound, the benchmark indices paused on Friday, with the Nifty index concluding at 24,005. The volatility index, India VIX, decreased by 1.43 percent to 13.54, indicating a reduction in market volatility.
“As long as the index stays above 23,900, we advocate a buy-on-dips strategy for Nifty,” stated Hrishikesh Yedve from Asit C Mehta Investment Intermediates Ltd.
The Sensex finished at 79,223.11, down by 720.60 points or 0.90 percent, on Friday.
Nifty Bank closed at 50,988.8, down by 616.75 points, or 1.20 percent. The Nifty Midcap 100 index ended the day at 57,931.05 after a decline of 177.15 points, or 0.30 percent, while the Nifty Smallcap 100 index closed at 19,033.70, down by 46.65 points, or 0.24 percent.
The auto sector outperformed others, spurred by strong December sales that surpassed typical seasonal demand.
Mid and small caps showed a modest recovery, whereas large caps trailed behind. Despite ongoing foreign institutional investor (FII) withdrawals, domestic institutional investors (DIIs) kept their positive outlook.
Despite earlier optimism regarding potential earnings growth in the forthcoming quarter, investors are proceeding with caution as they enter the New Year.
The uncertainty surrounding Trump’s economic policies and high valuations could influence the stock market in the short term, especially within emerging markets, according to experts.
Looking forward, the market is expected to focus significantly on the upcoming Q3 results, with expected improvements on a quarter-on-quarter basis. Additionally, investors are likely to adjust their portfolios based on pre-budget expectations. Key data points such as the FOMC minutes, US non-farm payroll figures, and the unemployment rate will play a vital role in shaping market sentiment, remarked Vinod Nair, Head of Research at Geojit Financial Services.
