The Indian stock market crashed on Monday, January 6, with both benchmark indices, Sensex and Nifty 50, ending the session with losses of over 1.5% each amid heavy selling across the board, as reports of a new virus outbreak in China spooked investors. The Nifty 50 ended the session down by 1.6%, slipping below the crucial 24,000 level to close at 23,616 points, while the Sensex also tumbled 1.59% to the 77,964 level.
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The broader market experienced even more pain, with the Nifty Smallcap 100 index and the Nifty Midcap 100 index plummeting by 3.2% and 2.7%, respectively.
All major sectoral indices finished the session in negative territory with Nifty PSU Bank, Nifty Metal, Nifty Energy, Nifty Realty, and Nifty Media falling the most, between 2.51% and 4%.
In terms of individual stocks, 46 constituents of the Nifty 50 index closed in the red, with ITC emerging as the top laggard with a drop of 8.1%, followed by Tata Group stocks such as Tata Steel and Trent, which lost over 4% of their value.
Other stocks, including BPCL, Coal India, NTPC, Adani Enterprises, Bharat Electronics, Kotak Mahindra Bank, Power Grid Corporation, Adani Ports & SEZ, and Asian Paints, all fell by between 3% and 4%.
Weak Asian Markets
Most Asian markets traded lower as sentiment remained cautious over the potential changes by the US President-elect Donald Trump, who has vowed to sharply raise tariffs on imports from China and other countries, potentially denting growth for a region heavily reliant on trade.
Japan’s Nikkei 225 index lost 1.5%, while the Hang Seng in Hong Kong declined 0.3%. The Shanghai Composite index dropped 0.2%.
US Dollar
A gauge of Asian currencies hit its lowest in almost two decades against the dollar and equities fluctuated, with gains from a buoyant chip sector countered by declines in Japanese stocks. The dollar traded near a two-year peak on Monday. The dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading around 108.74. The US dollar rose to 157.77 Japanese yen from 157.22 yen. The euro cost $1.0316, up from $1.0306.
Technicals
Nifty 50 has broken its key support levels, which has intensified selling pressure.
“Nifty 50 holds a good view until it stays above its 200 DMA which is placed at 23,900. While with inter month perspective Nifty direction will depend on what Donald Trump will do after he takes office as US President on January 20th 2025. Considering both the events upside on Nifty is likely to be capped.
Technically, the landscape suggests Nifty’s major support at 23,905 / 23,727 mark. Intermonth support seen at 23,000 mark. Nifty’s hurdles are seen at 24,321/ 24,857/ 25,500 mark and then at 26,277 mark,”
