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Sensex, Nifty trade in red after positive start on Monday
Jan-06-2025

Indian equity benchmarks made flat-to-positive start on Monday after U.S. stocks showed a strong move back to the upside during trading on Friday. But, soon markets turned volatile and are trading in red in early deals as a cautious undertone prevailed after foreign portfolio investors continued their selling spree and investors wait for cues from the Q3 earnings season, beginning with TCS this week. Investors also remained on side-lines ahead of India Services and Composite Purchasing Manager's Index (PMI) readings for December to be out later in the day for more directional cues. Traders were concerned as India’s foreign exchange reserves continue to decline, extending downhill journey for three months now. data from the Reserve Bank of India (RBI) showed, in the week that ended December 27, the country’s foreign exchange kitty declined by $4.112 billion to $640.279 billion. However, down side remained capped with Commerce and Industry Minister Piyush Goyal’s statement that the government is working on an export strategy to further accelerate the country's goods and services shipments. 

On the global front Asian markets are trading mixed. China's onshore yuan breached a key milestone for the first time since late 2023 amid reports that the People's Bank of China will issue the largest-ever offshore yuan bonds in Hong Kong this month. South Korea's Kospi average jumped after a court dismissed an appeal by lawyers of Yoon Suk Yeol against an arrest warrant for the impeached president.

Back home, auto component industry stocks are in focus with report that the Indian auto components sector faces a projected revenue slowdown to 6-8 per cent this and the next financial year due to softening of demand and sluggish global markets, industry players are actively diversifying their markets to mitigate the impact. In stock specific development, FSN E-Commerce jumped as it pegs Q3 revenue growth in higher mid-twenties.

The BSE Sensex is currently trading at 79072.78, down by 150.33 points or 0.19% after trading in a range of 79004.93 and 79532.67. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.53%, while Small cap index was down by 0.59%.

The few gaining sectoral indices on the BSE were Consumer Durables up by 0.85% and IT up by 0.55%, TECK up by 0.40%, while PSU down by 1.66%, Oil & Gas down by 1.65%, Metal down by 1.53%, Utilities down by 1.37% and Energy down by 1.33% were the top losing indices on BSE.

The top gainers on the Sensex were Titan Company up by 1.68%, Bajaj Finance up by 1.49%, Bajaj Finserv up by 0.84%, Infosys up by 0.78% and HCL Technologies up by 0.74%. On the flip side, ITC down by 5.60%, Kotak Mahindra Bank down by 2.39%, Tata Steel down by 2.06%, Nestle down by 1.46% and Power Grid down by 1.42% were the top losers.

Meanwhile, Commerce and Industry Minister Piyush Goyal has said that the government is working on an export strategy to further accelerate the country's goods and services shipments. He said the ministry is working on a ‘very’ targeted manner to take the exports to $2 trillion by 2030 by addressing concerns of exporters and identifying areas of India's competitive advantages and strengths. He said ‘Export of both goods and services are doing good despite global challenges... We are working on an export strategy to see how we can fast track growth of exports of both goods and services’.

In 2024-25, the exports are expected to cross $800 billion. It was $778 billion in the previous fiscal year. Regarding his expectations from the forthcoming Budget for exports, the minister said Prime Minister Narendra Modi has always been ‘very’ supportive of the exporting community. He added ‘I am sure the Prime Minister and the finance minister (Nirmala Sitharaman) will always be proactive to support our exports’.

On concerns of exporters with regards to declining export credit and high interest rates, Goyal said the ministry is looking at these issues holistically and are engaged with the stakeholders concerned. He said ‘We are continuously looking at working with the banking system and the ECGC (Export Credit Guarantee Corporation) to find solutions to these concerns of exporters’. According to the Federation of India Export Organisations (FIEO), there was a decline of 5 per cent in export credit between March 2022 (Rs 2,27,452 crore) and March 2024 (Rs 2,17,406 crore).

He said they are discussing the issue of revamping special economic zones (SEZs) with all stakeholders as well as SEZ units. He added ‘And I am sure a holistic solution will come out to address the concerns of SEZs very soon’. On concerns of dumping of goods from China, he asked the industry to immediately approach the ministry's arm DGTR (Directorate General of Trade Remedies) if they face unfair competition due to a surge in imports. He added ‘India will not allow any dumping. We will be proactive in our measures’.

The CNX Nifty is currently trading at 23962.10, down by 42.65 points or 0.18% after trading in a range of 23911.45 and 24089.95. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Titan Company up by 1.75%, Bajaj Finance up by 1.06%, Bajaj Finserv up by 0.76%, Infosys up by 0.58% and HCL Technologies up by 0.58%. On the flip side, ITC down by 5.40%, Kotak Mahindra Bank down by 2.41%, Tata Steel down by 2.09%, BPCL down by 1.99% and Coal India down by 1.83% were the top losers.

Asian markets are trading mixed; Nikkei 225 slipped 588.65 points or 1.48% to 39,305.89, Hang Seng declined 53.61 points or 0.27% to 19,706.66, Jakarta Composite fell 49.75 points or 0.69% to 7,114.68 and Shanghai Composite weakened 4.68 points or 0.15% to 3,206.75. On the other hand, Taiwan Weighted rose 635.29 points or 2.77% to 23,543.59, KOSPI increased 40.34 points or 1.65% to 2,482.26 and Straits Times was up by 10.88 points or 0.29% to 3,812.71.
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