Indian stocks witness profit booking as losses extend from previous session
Indian stock indices traded in the red on Tuesday, extending losses from the previous session due to profit booking after a remarkable performance in 2023. Analysts have also expressed concerns about high valuations. The benchmark indices, Sensex and Nifty, settled 0.4-0.5 per cent lower compared to the previous session.
Markets experienced volatility and lost nearly half a per cent during the session. The sentiment was weighed down by pressure on banking, auto, and IT majors, while resilience in pharma and energy majors helped limit the damage, according to Ajit Mishra, SVP of Technical Research at Religare Broking. Mishra suggested a preference for defensive sectors such as FMCG and pharma, while maintaining selectivity in others.
Vinod Nair, Head of Research at Geojit Financial Services, stated that investors are adopting a profit booking strategy ahead of the upcoming results season.
Despite some turbulence throughout the year, including the Adani-Hindenburg episode and the initial days of the Israel-Hamas war, the calendar year 2023 proved to be highly profitable for those who invested in Indian stocks. The Sensex and Nifty gained 18-19 per cent on a cumulative basis in 2023, compared to a mere 3-4 per cent in 2022.
Foreign Portfolio Investors (FPIs) have shown increased interest in India, becoming net buyers in the country’s stock market in 2023. In December, FPIs made significant investments, accumulating Rs 66,135 crore. The entire year saw an inflow of about Rs 171,107 crore, with over one-third of it coming in December. The inflow in November was Rs 9,001 crore, according to data from the National Securities Depository (NSDL).
India’s positive economic outlook, manageable inflation levels, political stability at the central government level, and indications that central banks worldwide have completed their monetary policy tightening have contributed to a positive market sentiment.
Key triggers for the markets in the first week of the new year include the S&P Global Manufacturing PMI and Services PMI, scheduled for release on Wednesday and Friday, respectively. Additionally, the US Federal Reserve will release the minutes of its latest monetary policy meeting on Thursday.
As Indian stocks continue to experience profit booking, investors will closely monitor these key events for further insights into market trends.
