Investors turned cautious after the first human metapneumovirus (HMPV) case being detected in Bengaluru amid reports of a virus outbreak in China.

At 13:25 IST, the barometer index, the S&P BSE Sensex, tumbled 1,097.11 points or 1.38% to 78,128. The Nifty 50 index declined 333.15 points or 1.39% to 23,671.60.

The broader market underperformed the frontline indices. The S&P BSE Mid-Cap index dropped 1.98% and the S&P BSE Small-Cap index slipped 2.63%.

The market breadth was weak. On the BSE, 747 shares rose and 3,305 shares fell. A total of 114 shares were unchanged.

Economy:

The seasonally adjusted HSBC India Services Business Activity Index rose from 58.4 in November to 59.3 in December, highlighting the strongest rate of expansion in four months.

At 59.2 in December, up from 58.6 in November, the HSBC India Composite Output Index signaled the strongest rise for four months. Private sector companies in India posted a faster increase in output at the end of the calendar year. The acceleration was driven by service providers, who recorded a quicker increase in business activity when factory production growth softened.

Ines Lam, economist at HSBC, said: “India’s service companies expressed strong optimism in December as business activity growth surged to a four-month high. Forward-looking indicators such as new business and future activity suggested that the strong performance will likely continue in the near future. The easing of input price inflation in the month also supported business sentiment. Strength in the services PMI stands in contrast with the growing signs of a slowdown in the manufacturing industry.”

India’s foreign exchange (forex) reserves declined by $4.112 billion to an eight-month low of $640.279 billion during the week ended December 27, according to the latest RBI data.

For the week ending December 27, foreign currency assets, a major component of the reserves, decreased by $4.641 billion to $551.921 billion.

Gold reserves increased by $541 million to $66.268 billion during the week. The special drawing rights (SDRs) were down by $12 million to $17.873 billion, according to the RBI.

India’s reserve position with the IMF was unchanged at $4.217 billion in the reporting week, the apex bank data showed.

Gainer & Losers:

Apollo Hospitals Enterprise (up 1.35%), Tata Consumer Products (up 1.23%), Titan Company (up 1.05%), Infosys(up 0.48%) and Tata Consultancy Services (up 0.34%) were the major Nifty gainers.

Tata Steel (down 3.93%), Trent (down 3.76%), Kotak Mahindra Bank (down 3.20%), Coal India (down 3.19%) and Bharat Petroleum Corporation (BPCL) (down 2.77%) were the major Nifty losers.

Titan Company gained 1.05% after the Tata Group company reported standalone revenue growth of 24% in third quarter of FY25.

Kotak Mahindra Bank declined 3.20% after Milind Nagnur, chief operating officer (COO) and chief technology officer (CTO) of the bank, tendered his resignation from the services of the bank due to personal reasons.

Stocks in Spotlight:

HDFC Bank declined 2.16%. The bank’s average deposits stood at Rs 24,52,700 crore as of 31st December 2024, registering the growth of around 15.9% as compared with Rs 21,17,100 crore as of 31st December 2023.

FSN E-Commerce Ventures (Nykaa) gained 4.50% after the firm stated that it has witnessed a strong performance with consolidated net revenue growth likely to be higher than mid-twenties in the third quarter of FY25.

Adani Wilmar fell 1.38%. The company announced that it has achieved a healthy volume growth of 6% year-on-year (YoY) in Q3 FY25, despite significant price hikes driven by a surge in raw material costs.

Dabur India slipped 3.41% after the company informed that it is set to record low single-digit growth in consolidated revenue in the December quarter (Q3 FY25), owing to a subdued demand in the healthcare and beverage segment.

Bank of Baroda dropped 5.63%. The bank’s said that its domestic deposits increased 9.23% to Rs 11,65,874 crore as on 31st December 2024 as compared with Rs 10,67,371 crore as on 31st December 2023.

Angel One advanced 2.39% after the company said that its client base jumped 51.7% to 29.52 million in December 2024 as compared with 19.45 million in December 2023.

Global Markets:

The Dow Jones index futures were up 19 points, signaling a mildly positive opening for U.S. stocks today.

Most of the European markets traded higher as investors sought more clues about the direction of the global economy.

Asian equities declined on Monday, despite China's services sector expanded in December at the fastest pace in seven months, driven by robust domestic demand. The Caixin services PMI surged to 52.2, exceeding both market expectations of 51.4 and the November reading of 51.5.

In South Korea, a court dismissed an appeal by lawyers of impeached President Yoon Suk Yeol against an arrest warrant, according to a local media report Sunday.

Investor sentiment remains mixed after a turbulent end to 2024. While anticipated monetary policy easing and the potential of artificial intelligence to drive growth remain supportive factors, the threat of escalating US-China trade tensions could derail any market rally. Investors are also closely monitoring Beijing for further stimulus measures.

US tech stocks staged a strong rebound on Friday, recovering from the losses seen in the final week of 2024. Investors had capitalized on the year-end rally, a period often characterized by positive market movements known as the "Santa Rally."

On Friday, the Dow Jones Industrial Average rose 0.8% to 42,732.13, the S&P 500 gained 1.3% to 5,942.47, and the NASDAQ Composite surged 1.8% to 19,621.68.

This week will feature a shortened trading schedule as the New York Stock Exchange will be closed on Thursday to honor the passing of former President Jimmy Carter.

The minutes from the Federal Reserve's December 17-18 meeting, scheduled for release on Wednesday, will provide further insights into the Fed's interest rate outlook. Recent statements have indicated a more cautious approach to rate cuts this year due to persistent inflation and a resilient economy.

The US December jobs report is due on Friday.