Final Trade: Sensex closes 109 points lower on final trading day of 2024; Nifty settles flat at 23,645

Indian equity markets ended the last trading session on a cautious note on December 31, with both benchmark indices paring early losses. At the close, however, Sensex ended with a cut of 0.14 per cent or 109.12 to settle at 78,139.01, while the Nifty50 index ended flat with a negative bias at 23,644.8.

IT drags, financials cushion fall

Losses were led by IT heavyweights as Tech Mahindra, Infosys, and HCL Tech declined over two per cent each. Tata Consultancy Services (TCS) also faced pressure, contributing significantly to the indices' downturn. The tech sector's weakness was attributed to global recession fears and elevated U.S. Treasury yields, which have historically impacted high-growth sectors.

On the flip side, financials and select consumer stocks provided some respite. State Bank of India (SBI) gained 1.8 per cent, while Nestle India and Asian Paints added over one per cent each, buoyed by stable domestic demand and positive management commentary.

Sectoral performance and broader markets

Sectorally, the IT index plunged by two per cent, making it the biggest laggard. Other sectors like metals and auto witnessed mixed trends, with Tata Motors and Adani Ports gaining marginally. The FMCG index saw modest gains, supported by optimism around rural demand recovery.

In the broader markets, mid-cap and small-cap indices ended flat, indicating cautious sentiment among investors. Despite the muted performance, select stocks from these indices bucked the trend, reflecting stock-specific action.

Global cues weigh on sentiment

Asian markets were largely subdued as concerns over elevated U.S. bond yields and slowing growth in China weighed on investor sentiment. Emerging markets, including India, felt the ripple effects, with foreign institutional investors continuing to offload equities.

What lies ahead?

Market participants will closely monitor global economic data and the direction of U.S. Treasury yields for cues. Analysts suggest that the upcoming earnings season and Union Budget expectations could influence market trends in January.

With volatility on the rise, traders are advised to adopt a cautious approach in the near term.