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Markets snap 2-day gains; Nifty ends below 24050 mark
Jan-03-2025

Indian equity benchmarks took a pause after two consecutive days of gains, shedding more than half a percent on Friday as investors pared exposure to Bank and IT stocks ahead of the earnings season starting next week. A depreciating rupee against the US dollar further weighed on sentiment. After making a slightly positive start, key gauges fell sharply as traders turned cautious with credit rating agency ICRA’s report stating that banks credit growth may ease to 9.7-10.3 per cent in FY26, weighed down by the persisting high credit-to-deposit (CD) ratio and implementation of the proposed changes in the liquidity coverage ratio (LCR) framework. ICRA has revised its credit growth estimate downwards to 10.5-11 per cent for FY25 from its earlier estimate of 11.6-12.5 per cent. Some concern also came with Chairman of the CII National Committee on EXIM, Sanjay Budhia’s statement that Indian exporters are grappling with significant liquidity challenges due to high interest rates and a decline in export finance, which are undermining their competitiveness.  

However, markets managed to erase some losses in late morning deals as traders took some support with exchange data showing that Foreign Institutional Investors (FIIs) turned buyers on Thursday after remaining net sellers for the past many days. They bought equities worth Rs 1,506.75 crore. But recovery proved short-lived as key gauges slipped further in late afternoon deals and ended near day’s low points, as sentiments remained downbeat amid reports that more than half of the respondents surveyed in the Reserve Bank of India’s (RBI) Systemic Risk Survey (SRS) do not expect a revival in the private capital expenditure cycle in the coming year, contrary to the central bank’s own assessment that economic activity is likely to pick up in the second half of this year. Investors overlooked a private report that Maharashtra has attracted Rs 1.13 lakh crore in foreign direct investment (FDI) in the first six months of FY 2024-25. This figure is nearly equivalent to the total FDI the state has received annually over the last four years.

On the global front, European markets were trading lower amid a lack of fresh economic data and significant corporate news. Asian markets ended mostly higher on Friday on hopes that China will follow through on its pledges to stimulate growth in the new year. To steer demand for credit, China's central bank is likely to cut interest rates from the current level of 1.5 percent ‘at an appropriate time’ in 2025. Back home, on the sectoral front, textile companies’ stocks were in watch as the government said India's textiles and apparel exports, including handicrafts, grew 7 per cent during the April-October period to $21.35 billion. The outbound shipments from the sector stood at $20 billion in the same period of the previous financial year, FY 2023-24. 

Finally, the BSE Sensex fell 720.60 points or 0.90% to 79,223.11, and the CNX Nifty was down by 183.90 points or 0.76% to 24,004.75.             

The BSE Sensex touched high and low of 80,072.99 and 79,109.73 respectively. There were 12 stocks advancing against 18 stock declining on the index.  

The broader indices ended in red; the BSE Mid cap index fell 0.33%, while Small cap index was down by 0.02%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.49%, Energy up by 1.10%, Consumer Durables up by 0.45%, PSU up by 0.44% and Metal up by 0.23%, while IT down by 1.31%, TECK down by 1.13%, Bankex down by 1.07%, Capital Goods down by 1.06% and Industrials down by 0.70% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 3.33%, Titan Company up by 1.70%, Hindustan Unilever up by 1.49%, Nestle up by 1.47% and Reliance Industries up by 0.78%. On the flip side, Zomato down by 4.27%, HDFC Bank down by 2.46%, Tech Mahindra down by 2.23%, Adani Ports &SEZ down by 2.15% and TCS down by 2.03% were the top losers.

Meanwhile, Union labour minister Mansukh Mandaviya has said that employment in the country has increased by 36 per cent to 64.33 crore in 2023-24 from 47.15 crore in 2014-15, which shows improvement in job creation during NDA period. He stated that employment under UPA grew by just about 7 per cent between 2004 to 2014. He noted that under the UPA government between 2004 to 2014 just 2.9 crore additional jobs were created whereas under the Modi government between 2014-24, 17.19 crore jobs were added.

The minister stated that In the last one year (2023-24) alone, the Modi government has created around 4.6 crore jobs in the country, the minister stated. The data assumes significance in the backdrop of pressure on the government for job creation in the country. About the agriculture sector, he said that employment declined by 16 per cent between 2004 to 2014 under UPA tenure whereas it has grown by 19 per cent between 2014 -2023 under Modi tenure. Similarly, employment in the manufacturing sector grew by just 6 per cent between 2004 to 2014 under UPA tenure while it increased by 15 per cent between 2014-2023 under Modi tenure.

He further informed that employment in the services sector grew by 25 per cent between 2004 to 2014 under UPA tenure while it increased by 36 per cent between 2014 -2023 under Modi tenure. He also said that the unemployment Rate (UR) dropped from 6 per cent in 2017-18 to 3.2 per cent in 2023-24 while the employment rate (WPR) grew from 46.8 per cent in 2017-18 to 58.2 per cent in 2023-24. Similarly, he informed that the Labour Force Participation Rate (LFPR) grew from 49.8 per cent in 2017-18 to 60.1 per cent in 2023-24. About the growth in youth joining the formal job market, he informed that in the last seven years (between Sept 2017- Sept 2024) over 4.7 crore youth (Age 18-28 years) have joined Employees' Provident Fund Organisation (EPFO) fold.

The CNX Nifty traded in a range of 24,196.45 and 23,976.00. There were 18 stocks advancing against 32 stocks declining on the index. 

The top gainers on Nifty were ONGC up by 5.11%, Tata Motors up by 3.13%, SBI Life Insurance up by 1.95%, Titan Company up by 1.80% and Nestle up by 1.40%. On the flip side, Wipro down by 2.83%, HDFC Bank down by 2.53%, Adani Ports & SEZ down by 2.30%, Tech Mahindra down by 2.11% and Cipla down by 1.98% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 11.04 points or 0.13% to 8,249.05, France’s CAC fell 69.77 points or 0.94% to 7,323.99 and Germany’s DAX lost 87.67 points or 0.44% to 19,936.99.

Asian markets ended mostly higher on Friday amid expectations that China will follow through on its pledges to stimulate growth in 2025. China's central bank PBoC said it is likely to cut interest rates from the current level of 1.5% at an appropriate time in 2025. Although, some gains were limited by concerns that US President-elect Donald Trump's policies on tariffs may fuel inflation. Seoul shares rose, led by gains in chips, batteries and bios as investors went for bargains amid protracted political turmoil following the short-lived martial law imposition by President Yoon Suk Yeol. Japanese market was closed for a holiday.

Asian Indices

Last Trade            

Change in Points

Change in %      

Shanghai Composite

3,211.43

-51.13

-1.59

Hang Seng

19,760.27

136.95

0.69

Jakarta Composite

7,164.43

1.22

0.02

KLSE Composite

1,629.46

-3.41

-0.21

Nikkei 225

--

--

--

Straits Times

3,801.83

1.02

0.03

KOSPI Composite

2,441.92

42.98

1.76

Taiwan Weighted

22,908.30

76.24

0.33
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