Santa skips D-Street, Dec poised to be second worst in a decade

Serv Pvt. Ltd, attributed the December drop to profit-booking, a shift in sector preferences toward IPOs, and a pullback by foreign portfolio investors (FPIs) in anticipation of a stronger dollar and a weaker rupee.

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Serv Pvt. Ltd, attributed the December drop to profit-booking, a shift in sector preferences toward IPOs, and a pullback by foreign portfolio investors (FPIs) in anticipation of a stronger dollar and a weaker rupee. "Large-cap stocks were sold off to fund investments in IPO-related opportunities for better returns," Choksey explained. "I believe growth concerns are overblown, and see this as a buying opportunity."

Deepak Jasani, head of retail research at HDFC Securities, concurred, citing FPI net selling driven by year-end considerations and disappointing macro data, particularly weak corporate earnings. "Much of the FPI inflow has been diverted to the primary market, putting additional pressure on the secondary market," he added.

Despite December's turbulence, analysts remain optimistic about the long-term outlook. Choksey said that robust IPO activity in 2024, which raised ₹1.6 trillion, could be the precursor to even greater volumes in 2025, potentially exceeding ₹2 trillion.