Bearish Markets, Resilient Large-Caps: Navigating the Current Market Phase
The Indian stock market is showing a bearish trend, but large-cap stocks are demonstrating resilience. Experts suggest that the consolidation phase is nearing an end, and strategic investment could be beneficial.
Indian Stock MarketLargecap StocksMarket ConsolidationFpisGdp GrowthReal Estate NewsJan 26, 2025
The Sensex and Nifty experienced losses of 0.5% to nearly 1%.
Real estate stocks were hit the hardest, with a decline of over 9%, while IT stocks saw a 3.57% gain.
Despite the market volatility, experts believe that the ongoing consolidation phase is drawing to a close.
On January 24, the Sensex dropped 329.92 points to close at 76,190.46, and Nifty fell 113.15 points, settling at 23,092.20.
Over the week, the Sensex lost 0.8% and underperformed compared to Nifty, which declined by 0.5%.
The most significant drop occurred on January 21, with both indices plummeting nearly 2%.
Although the market showed some recovery on January 22-23, it failed to maintain the momentum.
Foreign portfolio investors (FPIs) have been net sellers, withdrawing ₹64,156 crore from Indian equities by January 24.
The Indian rupee also faced pressure, closing near a record low of 86.6 against the US dollar before recovering slightly to 86.188, as the dollar saw its worst weekly fall in two months.
Amol Athawale, VP of Technical Research at Kotak Securities, highlighted that benchmark indices continued to face selling pressure at higher levels.
Nifty ended 0.49% lower, and Sensex fell by 405 points.
He identified key support levels for Nifty at 22,900 and resistance at 23,450.
Vinod Nair, Head of Research at Geojit Financial Services, attributed the bearish sentiment to weak real estate performance and PMI data but emphasized the resilience of large-cap stocks.
'The market is now in the final phase of consolidation,' Nair stated, advising investors to remain patient and adopt an accumulation strategy.
Religare Broking’s Ajit Mishra stressed the importance of upcoming events, such as the Union Budget on February 1 and major earnings announcements from companies like Tata Steel, Maruti, and ONGC.
'The consolidation appears to be setting the stage for long-term growth, supported by strong economic fundamentals,' Mishra said.
Experts recommend selective stock-picking and hedged positions to navigate the heightened market uncertainty.
Long-term investors are encouraged to leverage this phase for portfolio accumulation, as India's GDP growth is projected to accelerate from 6.4% in FY25 to 7% in FY26.
Disclaimer This information is provided for informational purposes only and should not be construed as investment advice.
Readers are encouraged to consult a qualified financial advisor before making any investment decisions.
Frequently Asked Questions
What are the key factors causing the bearish trend in the Indian stock market?
The bearish trend in the Indian stock market is primarily driven by weak real estate performance and PMI data. Additionally, foreign portfolio investors (FPIs) have been net sellers, withdrawing significant amounts from Indian equities.
Which sector is leading the decline in the stock market?
The real estate sector is leading the decline, losing over 9% during the recent trading week. This is in contrast to the IT sector, which saw a 3.57% gain.
What do experts suggest for investors during this market phase?
Experts recommend that investors remain patient and adopt an accumulation strategy. They also suggest selective stock-picking and hedged positions to navigate the market's heightened uncertainty.
What are the upcoming events that could impact the market?
Upcoming events that could impact the market include the Union Budget on February 1 and major earnings announcements from companies like Tata Steel, Maruti, and ONGC.
What is the projection for India's GDP growth in the next fiscal year?
India's GDP growth is projected to accelerate from 6.4% in FY25 to 7% in FY26, setting a positive stage for long-term growth.
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