Markets end lower as FII selling continues; auto stocks buck the trend

Equity benchmarks ended marginally lower on Tuesday, weighed down by persistent foreign institutional investor (FII) selling and concerns over economic growth, while auto stocks showed strength amid mixed global cues.

The BSE Sensex closed 67.30 points or 0.09 per cent lower at 78,472.87, while the NSE Nifty declined 25.80 points or 0.11 per cent to settle at 23,727.65. The market breadth remained negative, with 2,019 stocks declining versus 1,977 advances on the BSE.

Auto stocks emerged as outperformers, with Tata Motors leading the Nifty gainers, up 1.79 per cent, followed by Adani Enterprises (1.41 per cent), Eicher Motors (1.04 per cent), Nestle India (0.86 per cent), and BPCL (0.85 per cent). On the flip side, Power Grid was the top loser, dropping 1.68 per cent, followed by JSW Steel (-1.41 per cent), SBI Life (-1.28 per cent), Titan (-1.12 per cent), and Infosys (-1.09 per cent).

The Indian rupee’s weakness, which touched a record low of ₹85.13 against the dollar, added to the market’s cautious sentiment. Trading volumes remained subdued ahead of the Christmas holiday on Wednesday, with NSE cash market volumes hitting their lowest level in over a year, down 8 per cent compared to the previous session.

“The benchmark indices continued to exhibit narrow range-bound activity,” said Shrikant Chouhan, Head Equity Research at Kotak Securities. “Technically, the current market texture is non-directional, as traders seem to be waiting for a breakout in either direction.”

Sector-wise, most indices ended in the red, with metals experiencing the steepest decline. The banking sector also showed weakness, with the Nifty Bank index falling 84.60 points or 0.16 per cent to close at 51,233.00.

Market participants are now focusing on upcoming catalysts, including the Reserve Bank of India’s monetary policy and the Union Budget for 2025. “Investors are anticipating measures that could support economic growth and market stability,” noted Ameya Ranadive, Senior Technical Analyst at StoxBox.

In the broader market, the Nifty Midcap Select index showed resilience, gaining marginally by 0.01 per cent to close at 12,757.15, while the Nifty Next 50 declined 0.05 per cent to end at 68,857.25.

Technical analysts maintain a cautious stance on the market’s direction. “The near-term trend of Nifty is still weak and there are no signs of any important bottom reversals forming at the lows,” said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

In stock-specific action, HFCL shares gained after the company announced the inauguration of an advanced defense equipment manufacturing facility in Hosur, Tamil Nadu.

The market saw 170 stocks hitting 52-week highs, while 64 touched their 52-week lows. Nine stocks hit the upper circuit, while one stock hit the lower circuit.

Looking ahead, Satish Chandra Aluri from Lemonn Markets Desk commented, “We continue to believe that markets are entering a new macro regime in 2025, with rising uncertainty on inflation and growth leading to ‘higher for longer’ interest rates in the US, which will lead to stronger US Dollar impacting everything from foreign flows to currencies in emerging markets.”

Trading in Indian financial markets will remain suspended on Wednesday for Christmas.

Benchmark equity indices Sensex and Nifty ended on a flat note in a volatile trade on Tuesday, as investors preferred to stay on the sidelines awaiting further triggers amid persistent foreign fund outflows.

After gyrating between highs and lows, the 30-share index declined 67.30 points or 0.09 per cent to settle at 78,472.87. During the day, it dropped 142.38 points or 0.18 per cent to 78,397.79.

The NSE Nifty dipped 25.80 points or 0.11 per cent to 23,727.65.

From the 30 blue-chip stocks, Power Grid, State Bank of India, Titan, Tata Steel, IndusInd Bank, UltraTech Cement, Adani Ports and Infosys were among the laggards.

In contrast, Tata Motors, ITC, Nestle, Tata Consultancy Services, NTPC and Zomato were among the gainers.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 168.71 crore on Monday, according to exchange data.

In Asian markets, Shanghai and Hong Kong settled higher, while Seoul and Tokyo ended in the negative territory.

European markets were trading with gains in mid session deals. Wall Street ended in the positive zone overnight trade on Monday.

Global oil benchmark Brent crude climbed 0.62 per cent to USD 73.08 a barrel.

The BSE benchmark jumped 498.58 points or 0.64 per cent to settle at 78,540.17 on Monday. The Nifty surged 165.95 points or 0.70 per cent to 23,753.45.