Investors lost a record Rs 13.3 lakh crore in the first fortnight of the current calendar year — the highest-ever in absolute terms. In percentage terms, the 3% decline was the second-highest in a decade.
Foreign portfolio investors (FPIs) were the primary drivers of the downturn, selling shares worth $4.9 billion (Rs 42,363 crore) during the period. On the other hand, domestic institutional investors (DIIs) provided much-needed support to the markets, purchasing shares worth Rs 49,367 crore.
Also ReadFormer Paytm directors settle case with SEBI for Rs 3.3 crore
Benchmark indices Sensex and Nifty declined nearly 2% each, while the broader BSE Midcap and BSE Smallcap indices fell 5.8% and 5.2%, respectively, in the first fortnight of 2025.
On Friday, the Sensex fell 423.49 points or 0.55% to close at 76,619.33, while the NSE Nifty declined 108.6 points or 0.47% to settle at 23,203.20. For the week, the benchmark indices posted losses of up to 0.98%, marking their second consecutive weekly decline, driven by an underperformance in large-cap IT and banking stocks.
Nuvama Institutional Equities predicts that slowing economic growth in India and declining earnings-growth expectations may bring Indian stocks in line with other emerging markets. A rising dollar and higher US Treasury yields have triggered foreign outflows, resembling a pattern last seen in 2018. This has also led to a liquidity crunch domestically, according to a report by Nuvama strategists Prateek Parekh and Jatin Somani, cited by Bloomberg.
“Investors are increasingly adopting a risk-averse stance due to dollar strengthening. Additionally, rising uncertainty over potential economic policies from the new U.S. administration has impacted overall sentiment,” said Vinod Nair, head of research, Geojit Financial Services.
The market is expected to remain cautious in the short term due to moderate Q3 expectations. Persistent FPI outflows could also contribute to higher volatility. Looking ahead, the policies and comments of the incoming US president, particularly on tariffs, will be closely monitored, Nair added.
The realty sector was the top loser during the fortnight, falling 10.2%, followed by consumer durables (down 5.9%), healthcare (down 5.8%), services (down 5.5%), and banking (down 4.9%).
Energy was the sole sectoral gainer, rising 1.59% during the period.
Also ReadUpcoming IPOs next week: 1 Mainboard and 3 SME IPOs open for subscription, » Read More
