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Sensex, Nifty Fall for 3rd Day on Geopolitical Fears, Auto Stocks Drag

Indian equity benchmarks, the Sensex and Nifty, closed lower for the third consecutive session, pressured by geopolitical tensions and selling in automobile and oil marketing company stocks. Despite the weakness, Morgan Stanley maintains a positive medium-term outlook, setting a base-case Sensex target of 95,000 by December 2026. Sectoral performance was mixed, with auto and oil & gas indices declining sharply, while IT and consumer durables sectors posted gains. Broader market indices like the Nifty Midcap 100 and Smallcap 100 outperformed the main benchmarks, ending the day in positive territory.

Key Points: Sensex, Nifty End Lower Amid Geopolitical Worries

  • Markets fall for 3rd straight session
  • Auto & oil stocks under pressure
  • IT & consumer durables gain
  • Morgan Stanley sets bullish 2026 targets
  • Broader mid & smallcap indices outperform
2 min read

Sensex, Nifty end lower amid geopolitical worries

Indian markets fell for third session. Morgan Stanley sees Sensex at 95,000 by 2026. Auto, oil stocks drag; IT, consumer durables gain.

Sensex, Nifty end lower amid geopolitical worries
"A sustained move above 26,300 would be required to reinvigorate upside momentum - Market Watcher"

Mumbai, Jan 7

Indian equity markets ended lower for the third consecutive session on Wednesday as ongoing geopolitical tensions kept investors on edge and selling pressure in automobile and oil marketing company stocks weighed on overall sentiment.

At the close of trade, the Sensex slipped 102.20 points, or 0.12 per cent, to settle at 84,961.14. The Nifty also closed in the red, falling 37.95 points, or 0.14 per cent, to end at 26,140.75.

"A sustained move above 26,300 would be required to reinvigorate upside momentum toward the 26,500 level, while a decisive break below 26,000 could trigger a short-term corrective phase toward the 25,900-25,800 zone," a market watcher stated.

Despite the recent weakness, global brokerage Morgan Stanley remains optimistic about the medium-term outlook for Indian equities.

Under its base-case scenario, the brokerage has set a Sensex target of 95,000 by December 2026 -- indicating an upside potential of around 13 per cent from current levels.

In a more optimistic bull-case scenario, Morgan Stanley sees the Sensex climbing to 107,000, which would translate into a gain of about 25 per cent.

On the Sensex, shares of Maruti Suzuki, Tata Motors' passenger vehicle arm, Power Grid, Hindustan Unilever, Asian Paints and Tata Steel were among the biggest losers of the day.

On the other hand, buying interest was seen in Titan Company, HCL Technologies, Infosys, Tech Mahindra and Sun Pharma, which helped limit the overall downside.

Broader markets performed better than the frontline indices. The Nifty Midcap 100 index rose 0.45 per cent, while the Nifty Smallcap 100 gained 0.39 per cent.

Sectorally, auto and oil and gas stocks remained under pressure, with the Nifty Auto and Nifty Oil and Gas indices posting the sharpest losses.

In contrast, the Nifty Consumer Durables and Nifty IT indices led the gains, with the IT index rising as much as 1.87 per cent during the session.

Analysts said that market participants remained cautious amid global uncertainties, even as longer-term forecasts continue to point towards potential upside in Indian equities.

"In this macro backdrop, equities are likely to stay range-bound; a "buy-on-dips" strategy focused on large-cap themes appears prudent," an analyst said.

- IANS

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Reader Comments

S
Sarah B
The Morgan Stanley targets are encouraging for long-term investors like me. A 13-25% upside in 2-3 years is decent. This dip might be a good entry point for SIPs in index funds. Patience is key.
A
Anjali F
Auto stocks taking a hit again. With high fuel prices and uncertain global supply chains, it's no surprise. Maybe time to look at the IT and pharma sectors which are showing resilience.
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Vikram M
These minor corrections are normal in a bull market. The fundamentals of the Indian economy are strong. As they say, "market ka rona-dhona chalta rehta hai." Focus on quality stocks and hold.
K
Karthik V
Respectfully, I find these analyst predictions of 95k or 107k Sensex a bit speculative. It creates unrealistic expectations for retail investors. We should focus on quarterly earnings and domestic policies, not just distant targets.
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Priya S
Good to see IT stocks bouncing back! Infosys and HCL Tech are my portfolio's saviors today. The 'buy on dips' strategy makes sense, but only for blue-chips. Small investors should be careful.

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