• The Indian stock market ended flat on Wednesday, with the Nifty closing below 23,700 due to muted global cues and selling pressure in various sectors.
• Market volatility is attributed to slowing economic growth projections and caution ahead of Q3 numbers, but recovery was seen due to accumulation of beaten-down blue-chip stocks.
• Foreign institutional investors sold equities worth Rs 1,491.46 crore on January 7, while domestic institutional investors bought equities worth Rs 1,615.28 crore.
• Historically, the Indian stock market has shown resilience in the face of global economic uncertainties, recovering quickly from downturns due to strong domestic consumption and banking sector resilience.

The Indian stock market concluded on a flat note on Wednesday, with the Nifty closing below the 23,700 mark. This was largely due to muted global cues and selling pressure in various sectors, including auto, PSU Bank, financial service, pharma, metal, and realty. The BSE Sensex ended at 78,148.49, marking a decrease of 50.62 points or 0.06 per cent. The Nifty, on the other hand, settled at 23,688.95, down by 18.95 points or 0.08 per cent.

Bank Nifty, which led the marginal selling in the market, ended at 49,835, down by 367.10 points, or 0.73 per cent. The Nifty Midcap 100 index closed at 56,270.60 after dropping 598.70 points, or 1.05 per cent, while the Nifty Smallcap 100 index closed at 18,365.65 after declining 307.80 points, or 1.65 per cent.

On the Bombay Stock Exchange (BSE), 1,390 shares ended in green and 2,582 shares in red, whereas there was no change in 94 shares. The IT and FMCG segments emerged as the major gainers on the sectoral front.

Market Volatility and Recovery

Market experts have attributed this volatility to slowing economic growth projections and caution ahead of Q3 numbers. However, they also noted that the market witnessed a recovery from the day's low due to the accumulation of beaten-down blue-chip stocks and in expectation of government reforms in the upcoming budget to lift the tepid economy.

The experts further added, The near-term sentiment is likely to be subdued due to the rise in US bond yield and fear of fewer rate cuts by the Fed. In the Sensex pack, UltraTech Cement, L&T, Sun Pharma, HDFC Bank, ICICI Bank, NTPC, SBI, Zomato, Titan, Tata Steel and M&M were the top losers. On the other hand, TCS, ITC, Asian Paints, HCL Tech, Maruti Suzuki, Bharti Airtel, Axis Bank, Bajaj Finserv, Hindustan Unilever, PowerGrid, Nestle India and Tata Motors emerged as the top gainers.

Foreign institutional investors (FIIs) sold equities worth Rs 1,491.46 crore on January 7, while domestic institutional investors bought equities worth Rs 1,615.28 crore on the same day.

Historical Resilience of Indian Stock Market

Historically, the Indian stock market has shown resilience in the face of global economic uncertainties. For instance, during the 2008 global financial crisis, the Indian market, like many others, experienced a significant downturn. However, it managed to recover relatively quickly due to strong domestic consumption and the resilience of its banking sector.

Similarly, during the COVID-19 pandemic, the Indian stock market initially saw a sharp decline in March 2020. However, it rebounded strongly in the subsequent months, driven by positive global cues, strong corporate earnings, and the rollout of COVID-19 vaccines.