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Sensex, Nifty trade lower with cut of over half percent each in early deals
Jan-03-2025

Indian equity benchmarks made slightly positive start on Friday but failed to hold gains and slipped below neutral lines tracking overnight losses on Wall Street. Traders are eyeing the Bank loan and deposit growth data are scheduled to be released today. Sensex and Nifty extend their losses and are trading lower with cut of over half a percent each in early deals. Traders were concerned about Indian rupee after dollar hit a two-year high amid economic data indicated the US labor market remained on solid ground. There was some cautiousness amid Sensex’s weekly F&O expiry is scheduled today. However, broader indices -- BSE Mid & Small cap are trading higher. Traders took note of Commerce and Industry Minister Piyush Goyal’s statement that the implementation process of free trade agreement (FTA) between India and the four-nation European bloc EFTA is progressing fast and is expected to come into force before the end of this year. 

On the global front, Asian markets are trading mostly higher boosted by strong gains in materials and energy stocks on firm metal and crude oil prices. An unexpected decline by US weekly jobless claims also seemingly provided support for the US Fed's measured approach to lower interest rates. The Japanese market is closed for New Year Holidays on Friday.

Back home, oil & gas industry stocks are in focus as India Ratings and Research (Ind-Ra) said India's oil and gas demand is likely to remain strong in the next financial year even as weak global demand will drive down refining margins. The agency expects the credit profile of downstream companies to remain stable during the year, driven by healthy demand for petroleum products and healthy marketing margins that would offset compressed Gross Refining Margins (GRMs), yielding healthy overall EBITDA. 

The BSE Sensex is currently trading at 79431.20, down by 512.51 points or 0.64% after trading in a range of 79399.17 and 80072.99. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.12%, while Small cap index was up by 0.56%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.94%, PSU up by 0.78%, Consumer Durables up by 0.71%, Energy up by 0.54% and Consumer discretionary up by 0.45%, while IT down by 1.00%, TECK down by 0.94%, Bankex down by 0.53%, Healthcare down by 0.42% and FMCG down by 0.33% were the top losing indices on BSE.

The top gainers on the Sensex were Titan Company up by 1.51%, NTPC up by 0.59%, Tata Motors up by 0.56%, Tata Steel up by 0.51% and Bajaj Finance up by 0.46%. On the flip side, Tech Mahindra down by 1.70%, TCS down by 1.54%, Infosys down by 1.27%, ICICI Bank down by 1.20% and HDFC Bank down by 1.13% were the top losers.

Meanwhile, Commerce and Industry Minister Piyush Goyal has said that the implementation process of free trade agreement (FTA) between India and the four-nation European bloc EFTA is progressing fast and is expected to come into force before the end of this year (2025). The two sides signed the Trade and Economic Partnership Agreement (TEPA) on March 10, 2024. Under the pact, India has received an investment commitment of $100 billion in 15 years from the grouping while allowing several products such as Swiss watches, chocolates and cut and polished diamonds at lower or zero duties. The European Free Trade Association (EFTA) members are Iceland, Liechtenstein, Norway, and Switzerland.

The minister said the Swiss Council of States has approved the agreement and now will go to their National Council for approval. He said ‘“So this overwhelming support in political circles in Switzerland for the TEPA with EFTA is truly a sign of the times to come… and in their statement also, it shows that that it has cleared an important hurdle and they are hoping to bring in entry to force by autumn of 2025, before the end of calendar year 2025’.

The bloc committed an investment of $100 billion - $50 billion within 10 years after the implementation of the agreement and another $50 billion in the next five years - which would facilitate the creation of 1 million direct jobs in India. This is a first-of-its-kind pledge agreed upon in any of the trade deals signed by India so far. The commitment is the key substance of the TEPA (Trade and Economic Partnership Agreement), which took almost 16 years to conclude, for India in return for opening its markets for several products coming from the EFTA nations. There is a provision in the agreement that if the proposed investments would not come because of some reasons, India can suspend duty concessions to the four countries.

Domestic customers will get access to high-quality Swiss products such as watches, chocolates, biscuits, and clocks at lower prices as India will phase out customs duties under the trade pact on these goods over 10 years. It is taking time to implement the agreement due to an elaborate ratification process of these pacts in different countries. In India, such agreements are approved by the union Cabinet, in EFTA countries, they need approval from their parliament.

The CNX Nifty is currently trading at 24058.15, down by 130.50 points or 0.54% after trading in a range of 24051.50 and 24196.45. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were ONGC up by 3.04%, Trent up by 1.67%, Titan Company up by 1.65%, JSW Steel up by 0.83% and Tata Motors up by 0.67%. On the flip side, Hero MotoCorp down by 2.02%, Tech Mahindra down by 1.68%, Wipro down by 1.55%, TCS down by 1.34% and HDFC Bank down by 1.29% were the top losers.

Asian markets are trading mostly higher; Hang Seng surged 170.71 points or 0.86% to 19,794.03, Taiwan Weighted advanced 140.12 points or 0.61% to 22,972.18, KOSPI increased 54.05 points or 2.2% to 2,452.99 and Jakarta Composite rose 3.58 points or 0.05% to 7,166.79. On the other hand, Shanghai Composite weakened 15.02 points or 0.46% to 3,247.54 and Straits Times was down by 1.77 points or 0.05% to 3,799.04.
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