Sensex, Nifty today: Why stock market is falling on Friday the 13th

Stock market indices Sensex and Nifty fell on Friday the 13th, with the selling being observed across the board. A total of 2,298 out of 3,378 actively traded stocks fell, some 90 stocks hit their lower circuit limits and 19 stocks hit their 52-week lows. While FPI trend has turned positive in December, provisional data showed they sold Rs 3,560 crore worth equities on Thursday. There are concerns over strong dollar and a rise in US bond yields. Add to that are concerns China is open to devalue Yuan in the wake of likely trade war with the US.

In Asia, markets across China, Hong Kong and Japan fell as no fresh details on fiscal stimulus were offered by China’s Central Economic Work Conference, even as authorities there pledged to boost consumption.

"There is resumption of selling by the FPIs as they sold stocks worth Rs 3,560 crore yesterday. Given the high valuations in India, FPIs are likely to sell more at every market rise. Selling has been profitable for FPIs since the dollar has been appreciating after the US elections," said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
The US dollar index, which tracks the dollar movement against a basket of six major world currencies, edged 0.15 per cent to 107.11. The US10-year bond yield climbed to 4.324 from 4.151 on December 6.

The BSE Senex plunged 943.10 points, or 1.16 per cent, to 80,346.86. The Nifty declined 284.75 points, or 1.16 per cent, to 24,263.95. All except Bharti Airtel fell from the Sensex pack. The fall was led by steel stocks Tata Steel and JSW Steel, which dropped 3 per cent each. Private lenders IndusInd Bank and Axis Bank declined up to 2.5 per cent. NTPC, Bajaj Finserv, Mahindra & Mahindra and ITC slipped up to 2 per cent.

"The final trading day of the week will be critical in determining whether the index concludes near the upper or lower end of the crucial 24,400–24,700 range, which could set the tone for the upcoming week.," said Sameet Chavan, Head Research, Technical and Derivative at Angel One. "Traders should monitor these key levels closely, align their strategies accordingly, and keep an eye on global developments, as they are likely to influence the next phase of market momentum," he said.

"Yesterday's drop had higher participation compared with what was seen the day before, which means market participants are nervous. The index is now sitting inside the 50- and the 100-day averages, with the former expected to offer support around 24,430, a level that sits inside critical support that spans the 24,360 and 24,445 zone. Immediate support lies at 24,500, which bulls will need to protect at least on a closing basis," Akshay Chinchalkar, Head of Research at Axis Securities said earlier today.

The index has fallen below the level intraday. To manage risk effectively, maintaining a strict stop-loss at 24,000 on a closing basis is recommended, said Hardik Matalia, Derivative Analyst at Choice Broking.

Nifty valuations, investor strategy

"The Nifty 50 Index's valuation at 19.5 times FY26 (Estimated) and 17 times FY27E P/E (price to earning) is reasonable given the consensus earnings growth of mid-teens CAGR (compound annual growth rate) over FY23-FY27. Earnings growth is broad-based, providing better certainty. Some sectors particularly amongst industrials trading at a premium. Mean reversion is expected in these richly valued sectors," said Mirae Asset Mutual Fund.

The mutual fund house said investors may invest based on their risk profile and continue allocating via SIPs ( Systematic Investment Plan). "We may prefer large-cap oriented funds and hence any fresh allocations can be made in diversified funds like large cap, Flexi cap and Multi cap," it said.