More Stories

Informist, Monday, Jan. 6, 2025

By Anshul Choudhary

MUMBAI – Benchmark indices are likely to fall more Tuesday as Monday's unexpected decline has affected market sentiments negatively. Lower-than-expected credit growth by banks and no signs of significant recovery in demand for consumer-facing companies is likely to lead to further decline as valuations are still not in a comfortable zone, analysts said. 

Several banks reported their quarterly business, along with a few other companies in consumer-facing sectors such as fast-moving consumer goods and retail. These numbers were largely below expectations and hurt the prospects of a significant recovery in earnings during the December quarter. The Nifty 50 closed 1.6% down at 23616.05 points, wiping off gains accumulated in the previous two weeks.

"This kind of fall does shake one's confidence...the fall (in Nifty 50) below 22700 points should not be taken lightly," Raj Deepak Singh, derivatives analyst at ICICI Securities, said. Analysts expect the Nifty 50 to test 23500 points again in the coming sessions, with some analysts even expecting the fall to extend to 23200 points. 

There is also worry that the capital expenditure by the government during the December quarter was slower than expectations, which is likely to affect growth prospects in the near term. JM Financial Institutional Securities said the government's capital expenditure is likely to fall short by 10% as compared to the budgeted target for 2024-25 (Apr-Mar) of over INR 11 trillion.  

There are some worries over the human metapneumovirus that has spread in China and even reached India, with the Indian Council of Medical Research confirming two cases in Karnataka on Monday. Analysts are keeping a close watch on the news around the virus but are largely downplaying the impact for now.

Considering the risk of a slowdown in earnings growth and lack of positive triggers ahead of the December quarter earnings, analysts are not hopeful of a bounce-back in stock prices in the near term. However, indices may see some buying Tuesday after the sharp fall of Monday, but even in that case, analysts expect the Nifty 50 to face resistance at 23700-23800 points. 

In major global data, the European Union's unemployment data for November will come out Tuesday. Further, the European Union's flash estimate for euro area inflation for December will be released Tuesday.  End

Edited by Tanima Banerjee

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.