Dalal Street edges down amid low volumes, global uncertainty

India’s equity indices fell around half a per cent on Friday, as investors trimmed bets ahead of the weekend amid thin, year-end holiday trading. Gold and silver jumped to all-time highs, extending their record-breaking rally.

The Nifty finished at 26,042, closing 99 points or 0.4% lower. The Sensex ended at 85,041, down 0.4% or 367 points. Both indices closed up to 0.3% higher in the shortened trading week.

“Investors are hesitant to carry positions over the weekend as global uncertainties weigh on the sentiment,” said UR Bhat, co-founder & director at Alphaniti. “Due to a lack of fresh triggers, the market is expected to remain in a tight range.”

While most of this is priced in, any dramatic newsflow could impact the market, he said.

Trading remained sparse across the globe with various Asia-Pacific markets such as Australia, New Zealand and Hong Kong, along with most of Europe shut for holidays.

In the rest of Asia, Japan and Taiwan rose 0.7% each. South Korea advanced 0.5%, while China moved marginally higher. Among precious metals, on Friday, gold prices rose about 1.3% while silver prices gained 1.4% and hovered around $75.
At home, analysts expect the index to move within a band. “On the short-term chart, Nifty is expected to be in the range of 25,700 and 26,300 levels since no major moves are expected,” said Vipin Kumar, AVP Equity Research & PMS (Derivatives & Technical Analyst), Globe Capital Market. Till the benchmark trades above 25,400 levels, the long-term uptrend is intact, he said.

The Nifty IT index dropped 1% while the Nifty Auto and Bank Nifty indices moved 0.5% and 0.3% lower.

The Nifty Mid-cap 150 index declined 0.3% and the Small-cap 250 index shed 0.2%. Out of the 4,379 shares traded on the BSE, 1,690 advanced, while 2,540 declined. In the past week, the Mid-cap index closed 0.2% higher while the Small-cap index gained 1.3%. “The sentiment is further cautious on the broader market as investors expect these stocks to be hammered in case of any major negative global newsflow,” said Bhat. “Since retail investors have no lock-in, they prefer to participate in the IPOs instead.”

Foreign portfolio investors (FPIs) sold shares worth a net ‘317 crore on Friday. Their domestic counterparts bought shares worth ‘1,772 crore. In December, global investors sold stocks worth ‘18,909 crore.

Bhat said that Nifty is expected to move either 1% up or down in the near term, and the sell-off on the foreign investors’ front is likely to continue, at least untill there is some clarity on the tariff front.