Sensex, Nifty: Rs 3.33 lakh crore gone! Why stock market is falling today 

Concerns over a slowing economy dragged benchmark indices Sensex and Nifty lower on Wednesday. Investor wealth as suggested by the BSE market capitalisation got eroded by Rs 3.3 lakh crore in the broad-based market selloff, as two actively-traded stocks declined on every stock that advanced. The fall was led by many reasons, including weaker-than-expected advance GDP estimates at home, and a strong economic data in the US that dashed Fed rate cuts hopes. Investors were also jittery ahead of Q3 results season, which is expected to bring further earnings downgrades.

The government expects the real GDP growth for FY25 to slow to 6.4 per cent in its first advance estimate from 8.2 per cent in FY24, below the Ministry of Finance’s forecast of 6.5 per cent and the RBI’s projection of 6.6 per cent. The first advance estimates for FY25 GDP, serves as the reference for the Union Budget. "We expect growth to be revised lower in final estimates. While nominal GDP growth is lower than budgeted, fiscal deficit remains on track," Sonal Varma of Nomura India said.

"Advance estimates Nominal GDP growth in Q324 hit a 15 quarter low at 8 per cent YoY, and has stayed below 10 per cent for seven out of the last eight quarters. The slowdown is broad-based sector wise, and is starting to impact wages, revenues, and sentiment indicators," said HSBC.

Besides, investors were jittery over the Q3 earnings, which will kick start with TCS' on Thursday. A couple of brokerages such as Nuvama Institutional Equities, MOFSL and Antique Stock Broking are expecting a mere 2-6 per cent growth for Nifty companies in Q3.

On Wednesday, Sensex quoted at 77,709.33, down 489.78 points or 0.63 per cent. Nifty fell 141 points or 0.59 per cent to 23,566.90. Zomato Ltd led the Sensex fall, declining 2.42 per cent to Rs 246.40. The BSE m-cap declined3.33 lakh crore to Rs 4,38,41,831 crore against Rs 4,41,75,150 crore on Tuesday.

Titan Company Ltd, Adani Ports Ltd, Infosys Ltd and Tech Mahindra Ltd declined up to 2.32 per cent. SBI, ICICI Bank, HDFC Bank and Bajaj Finance were some of the other index losers. Shares of Reliance Industries Ltd (RIL) gained 2 per cent in Wednesday's trade and were up for the second straight session after a couple of foreign brokerages suggested a favorable set up for the oil-to-telecom major in 2025. Bernstein finds the risk-reward attractive on the counter as it suggested a target price of Rs 1,520 on the counter.

"The trend of strong US macros weakening emerging markets is continuing. The US 10-year bond yield has spiked to 4.67 per cent on better-than-expected jobs numbers and indications of the services sector doing very well. This means the Fed may hold rates in January leading to further strengthening of the dollar and rising bond yields. The fall out of this on the Indian macros is that the RBI may hold rates in February against the market expectation of a cut," said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services:

"In this macro setting, FIIs are likely to continue selling, putting pressure on the market. Large caps, despite fair valuations, may continue to be on the defensive. Investors can take a slightly long-term view of the market and buy largecaps in financials, IT, pharmaceuticals and select autos. These segments will bounce back in a few months when macros turn positive for India," he said.

Overnight data showed that US services sector activity accelerated in December while job openings also increased in November.