Nifty50 Drops 200 Points Amid Relentless FII Selling; Rupee Plunges to Record Lows

The NSE benchmark Nifty50 index started on a lower note on January 13, 2025, slipping below the critical 23,200 mark during intraday trading. While it managed to recover marginally from the intraday lows, trading above 23,200, the index remained down by 207 points or 0.88% as of 11:53 am. 

Market Breadth: Declines Dominate

The market breadth of the Nifty50 paints a bleak picture, with only 5 stocks trading in the green compared to 45 in the red. Banking heavyweights, ICICI Bank and HDFC Bank have emerged as the primary contributors to the index’s decline, jointly accounting for 61 points of the fall. On the flip side, TCS and Axis Bank attempted to lend some support, with TCS extending its gains from the previous trading session.

Foreign Institutional Investors (FIIs) Remain Net Sellers

The persistent selling by Foreign Institutional Investors (FIIs) has been a significant drag on the index. FIIs have sold equities worth ₹21,357.50 crore in January alone (as of January 10, 2025). Since the Nifty50 hit its all-time high of 26,277.35 on September 27, 2024, total FII outflows have exceeded ₹2 lakh crore, underscoring the heavy pressure on the Indian equity markets.

Indian Rupee at Record Low

Adding to the challenges, the Indian rupee declined past the 86 per USD mark for the first time. The rupee opened at an all-time low of 86.17 on Monday and, as of 12:25 pm, traded at 86.46. The depreciation followed a robust U.S. jobs report, which strengthened expectations that the U.S. Federal Reserve will not reduce interest rates significantly this year.

Key Macro Events Ahead

This week, all eyes are on the U.S. PPI and CPI inflation reports, scheduled for January 14 and 15, 2025. These reports are likely to influence global market trends and could dictate the Federal Reserve’s monetary policy stance going forward.

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