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Nifty witnesses sharp decline amid HMPV fears

06 Jan 2025 Evaluate

Indian equity benchmark -- Nifty -- concluded Monday's trading session near its low point for the day, as investors were cautious after the Indian government confirmed two cases of Human Metapneumovirus (HMPV) in Karnataka amid reports of a virus outbreak creating havoc in China.  After making a marginally positive start, soon index entered into red, as a cautious undertone prevailed after foreign portfolio investors continued their selling spree and investors wait for cues from the Q3 earnings season, beginning with TCS this week. Traders were concerned as India’s foreign exchange reserves continue to decline, extending downhill journey for three months now. data from the Reserve Bank of India (RBI) showed, in the week that ended December 27, the country’s foreign exchange kitty declined by $4.112 billion to $640.279 billion. 

In afternoon session, index extended its losses and continued its downward trend till the end, as sentiments remained down beat with the private report stating that India's current account deficit (CAD) is expected to remain elevated in FY26 due to stringent global trade policies. The report highlighted that the country's imports have consistently outpaced exports, leading to a widening trade deficit. The risk of a further deterioration in India's trade balance due to sluggish exports, which will keep the country's current account deficit (CAD) elevated. Finally, Nifty ended with cut of over one and half percent. 

All the sectorial indices ended in red. The top gainers from the F&O segment were FSN E-Commerce Ventures, RBL Bank and Metropolis Healthcare. On the other hand, the top losers were Union Bank of India, ITC and HFCL . In the index option segment, maximum OI continues to be seen in the 24900 - 25100 calls and 22900 - 23100 puts indicating this is the trading range expectation.

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