Markets Extend Decline Ahead Of Tcs Q3 Results, Sensex Down 500 Pts, Nifty Below 23,550; Fmcg Shines

Markets extend decline ahead of TCS Q3 results, Sensex down 500 pts, Nifty below 23,550; FMCG shines

Markets Slide Ahead of TCS Q3 Results; FMCG Index Outperforms

India’s stock markets experienced a significant downturn on January 9, 2025, as investors exercised caution ahead of Tata Consultancy Services’ (TCS) third-quarter earnings announcement. The Sensex dropped 528.28 points or 0.68% to close at 77,620.21, while the Nifty slipped 162.45 points or 0.69%, ending the session at 23,526.50.

Markets breadth remained negative, with 2,610 shares declining against 1,175 advancing on the BSE. All major sectoral indices ended in the red, except for the FMCG index, which bucked the trend to gain nearly 1%.


Sectoral Performance

The broad-based selloff impacted almost all sectors, reflecting cautious investor sentiment.

Banking Sector:
The banking sector, previously a key driver of the markets recovery post-November 2024 lows, saw sharp declines. The Nifty PSU Bank index dropped over 1% following disappointing Q3 business updates from several major banks. This underperformance weighed heavily on overall markets sentiment.

Realty Sector:
The Nifty Realty index emerged as the biggest loser, falling nearly 3%. Heavyweights like DLF, Godrej Properties, and Oberoi Realty led the decline, as concerns over rising interest rates and muted demand continued to weigh on the sector.

Energy Sector:
The Nifty Energy index declined more than 2%, dragged down by ONGC, Coal India, and Suzlon Energies. Weak global cues and a lack of positive triggers added to the pressure.

FMCG Sector:
In a stark contrast, the FMCG index rose by nearly 1%, defying the overall bearish trend. This surge was fueled by CLSA’s positive outlook on consumer staples for 2025. The brokerage upgraded its stance to “overweight” after four years of avoiding the sector, citing improving growth prospects and strong fundamentals. Major stocks such as Nestle, Britannia, and Hindustan Unilever gained significantly, driving the index higher.


Stock-Specific Highlights

Tata Consultancy Services (TCS):
Shares of TCS declined nearly 2% ahead of its Q3 results. Markets expectations remain muted due to higher furloughs in the October-December quarter, though the depreciation of the Indian rupee is expected to aid margins.

According to a Moneycontrol poll of seven brokerages, TCS is likely to report a marginal sequential revenue decline to ₹64,218 crore from ₹64,259 crore in the previous quarter. Investors will closely watch management commentary on demand trends and margin performance.

Bajaj Auto:
Bajaj Auto gained nearly 2% after CLSA upgraded the stock from “underperform” to “outperform.” The brokerage highlighted growth opportunities in Bajaj’s electric two-wheeler business and recent corrections in its valuation as key drivers for the upgrade.

Kalyan Jewellers:
Shares of Kalyan Jewellers fell over 4%, extending their losing streak to five sessions. The company’s Q3 FY25 business update indicated a 39% rise in net revenue, driven by festive and wedding season demand. Despite the positive revenue outlook, profit margins and same-store sales growth were areas of concern for investors.


Markets Sentiment and Technical Insights

Investor sentiment remained subdued as foreign fund outflows and a lack of positive triggers weighed on the market. Analysts suggest that the upcoming earnings season will play a critical role in shaping market direction.

Ajit Mishra, Senior Vice President at Religare Broking, noted:

“The banking sector’s underperformance, coupled with continued foreign fund outflows, is dampening market sentiment. The upcoming earnings season could provide a much-needed catalyst if results exceed expectations.”

On the technical front, analysts provided key levels for the Nifty and Bank Nifty indices:

  • Nifty Support Levels: 23,600, 23,500, and 23,400
  • Nifty Resistance Levels: 23,800, 23,900, and 24,000
  • Bank Nifty Support Levels: 49,400, 48,900, and 48,500
  • Bank Nifty Resistance Levels: 50,000, 50,300, and 50,500

Broader Market Performance

The broader market mirrored the weakness in benchmark indices, with mid-cap and small-cap indices declining by 0.9% and 1.3%, respectively. Experts believe that the focus on stock-specific opportunities is likely to intensify in the near term.


Outlook

As investors await TCS’ Q3 earnings and the overall earnings season for directional cues, market experts caution against aggressive bets. With nine consecutive years of market growth behind it, 2025 is expected to be a stock-picker’s market, emphasizing sector-specific and theme-driven strategies.

While the broader market struggles, the FMCG sector’s resilience highlights the importance of diversification and strategic allocation in volatile conditions.

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