Sensex, Nifty: Why stock market is falling today

Benchmark indices Sensex and Nifty fell on Monday after Friday's highly volatile session. A total of 28 of 30 Sensex stocks fell, even as the advances outnumbered declines in the broader market. The markets globally is awaiting the US Fed meeting, scheduled for December 17-18, which is associated with a summary of economic projections.

All major Asian markets were trading in the red, with the Chinese market tanking over 1.5 per cent. Hong Kong, Taiwan and Japanese market fell up to 1 per cent. Investors were worried about rising US bond yields. The Chinese figures released on Monday showing 3 per cent growth in retail sales in November against an estimate of 4.6 per cent, as suggested by Reuters, also hurt sentiment.

V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services: 

"The excessive volatility witnessed is a reflection of the sharp differences in perceptions about the near-term market trend. The huge positions in F&O segments are causing such heightened volatility in the market. The 500 point move on Nifty on Friday from the day’s trough to the peak indicated massive short coverings," said  V K Vijayakumar of Geojit Financial Services. 
Vijayakumar said even as the FPIs turned buyers in December investors must not assume that  the FPIs will continue to buy. 

"Strong dollar and high bond yields in the US are headwinds for capital flows. A slowdown in GDP growth and stagnant earnings growth are hurdles in the path of the bull. Friday's gain will sustain only if the data regarding growth and earnings show recovery. This will take some time," he said earlier today.    

The BSE Sensex fell 534.40 points, or 0.65 per cent to 81,598.72. Nifty stood at 24,605.95, down 162.35 points or 0.66 per cent.

Titan Company Ltd fell 2.05 per cent to Rs 3,437.05 and was the worst Sensex performer. It was followed by JSW Steel, UltraTech Cement, Tech Mahindra and Adani Ports, which fell 1.2-1.5 per cent. HDFC Bank and two IT stocks TCS and Infosys contributed about 200 points to the Sensex fall.  

Domestic reasons

For FY25, Nifty EPS has been cut by 6 per cent and earnings growth projection is 10%. A sharp slowdown in GDP growth driven by the double contraction viz. 15 per cent decline in government capex in H1 and a 5 percentage ponts contraction in bank credit growth had driven earnings misses across sectors, Jefferies noted recently.

"With the spending patterns now recovering to normal from the govt, good monsoon rainfall helping drive inflation likely lower and the RBI's growth tightening campaign largely behind we
expect macro pressures to ease and the positives of the broader capex cycle to reassert," Jefferies said recently. 

Jefferies has a December 2025 Nifty target of 26,600. It is overweight on banks, telcos, two-wheelers, healthcare, real estate, IT & power.