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Sensex, Nifty snap two-day losing streak
Jan-07-2025

Indian equity benchmarks snapped two-day losing streak and ended in green on Tuesday as investors awaited the first advance estimates of gross domestic product (GDP) for FY25, for more directional cues. The key indices opened higher, driven by favorable global cues. Traders took encouragement with Prime Minister Narendra Modi’s statement after US National Security Advisor Jake Sullivan met him that the India-US comprehensive global strategic partnership has scaled new heights, including in areas of technology and defence. However, markets erased some gains in morning deals, amid cautiousness after detection of human metapneumovirus (HMPV) in India. India has reported at least five cases of HMPV, which causes respiratory illness and was recently identified in China and Malaysia. Two cases were detected in Karnataka, two in Tamil Nadu, and one in Gujarat. Some concern came with exchange data showing that Foreign Institutional Investors (FIIs) offloaded equities worth Rs 2,575.06 crore on Monday.

However, markets regained some traction in late morning deals and witnessed range-bound price action for rest part of the day as traders took support with domestic rating agency ICRA’s report stating that securitization volumes jumped 80 per cent on-year to Rs 68,000 crore in the December quarter (Q3FY25), and has also upped its estimates on total volumes for this financial year (FY25). The financial system is estimated to witness securitization deals, where a lender passes on future receivables to another stakeholder against upfront cash, of around Rs 2.4 lakh crore, up from the previously estimated Rs 2.1 lakh crore. The new estimate represents a 25 per cent increase over the Rs 1.92 lakh crore in FY24. Sentiments were positive amid a private report stating that the Centre is expected to release the next instalment of special assistance to states even if they have not met capital expenditure targets. In July 2024, the Centre increased the budgetary allocation under the programme to Rs 1.5 lakh crore, a significant rise from Rs 1.05 lakh crore in the previous fiscal.

On the global front, European markets were trading mostly in green despite cautious moves amid a lack of significant triggers. Asian markets ended mostly higher on Tuesday as some investors hoped incoming US President-elect Donald Trump could adopt a less aggressive tariff stance than promised when he takes office. Back home, stocks related to steel sector were in focus as Ministry of Steel has launched the second round of Production Linked Incentive (PLI) scheme for Specialty Steel, termed as PLI Scheme 1.1 on January 6, 2025, for five product categories which is the same as the existing PLI Scheme to enable further participation as industry participants requested the ministry for relaxation.

Finally, the BSE Sensex rose 234.12 points or 0.30% to 78,199.11, and the CNX Nifty was up by 91.85 points or 0.39% to 23,707.90.             

The BSE Sensex touched high and low of 78,452.74 and 77,925.09 respectively. There were 20 stocks advancing against 10 stocks declining on the index.  

The broader indices ended in green; the BSE Mid cap index rose 0.77%, while Small cap index was up by 1.74%.

The top gaining sectoral indices on the BSE were Energy up by 1.55%, Oil & Gas up by 1.47%, Industrials up by 1.43%, Basic Materials up by 1.34% and Healthcare up by 1.18%, while TECK down by 0.51% and IT down by 0.36% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.25%, Reliance Industries up by 1.86%, Indusind Bank up by 1.44%, ICICI Bank up by 1.28% and Asian Paints up by 1.10%. On the flip side, Zomato down by 4.59%, HCL Technologies down by 1.73%, TCS down by 1.62%, Tech Mahindra down by 0.94% and Maruti Suzuki down by 0.37% were the top losers.

Meanwhile, domestic rating agency ICRA in its latest report has said that securitization volumes jumped 80 per cent on-year to Rs 68,000 crore in the December quarter (Q3FY25), and has also upped its estimates on total volumes for this financial year (FY25). The financial system is estimated to witness securitization deals, where a lender passes on future receivables to another stakeholder against upfront cash, of around Rs 2.4 lakh crore, up from the previously estimated Rs 2.1 lakh crore. The new estimate represents a 25 per cent increase over the Rs 1.92 lakh crore in FY24.

According to the report, the October-December volumes were similar to the ones observed in July-September (Q2), and participation of private sector banks is helping the volumes and typically it is the non-bank lenders who raise resources through this route. It can be noted that a 'war for deposits' has ensued in the banking system which even led to concerns surrounding the system's ability to find sufficient resources to cater to credit demand, while the merger impact has led HDFC Bank to adopt the securitization route. It said personal loan and unsecured business loans are also facing asset quality stress in the recent quarters and hence, its volumes have been sliding in Q3FY25, adding that it does not expect any material impact on the credit quality of the rated PTC (pass through certificate) transactions. Of the overall securitisation volumes, up to 60 per cent volumes are through the PTC issuances, whereas the remaining share is through direct sell-downs.

The report said the investor preference for the mode of securitisation has remained consistent with public sector banks preferring the direct assignment (DA) route while private sector banks opting more for the PTCs, and added that among the asset classes that are securitised, vehicle loans still dominate the market, given that large banks and NBFCs in this space have been securitising their car loans and commercial vehicle loans portfolio. The growth momentum displayed by the microfinance loans in the first quarter has reduced in subsequent quarters due to the apparent asset quality stress being seen in the industry, leading to lower disbursements and thus lower funding requirements.

The CNX Nifty traded in a range of 23,795.20 and 23,637.80. There were 32 stocks advancing against 18 stocks declining on the index. 

The top gainers on Nifty were ONGC up by 3.79%, SBI Life Insurance up by 2.62%, HDFC Life Insurance up by 2.31%, Tata Motors up by 2.09% and Adani Enterprises up by 2.03%. On the flip side, Trent down by 2.20%, HCL Technologies down by 1.86%, TCS down by 1.56%, Eicher Motors down by 1.43% and Tech Mahindra down by 0.99% were the top losers. 

European markets were trading mostly in green; France’s CAC rose 35.22 points or 0.47% to 7,480.91 and Germany’s DAX gained 39.87 points or 0.2% to 20,256.06, while UK’s FTSE 100 decreased 17.54 points or 0.21% to 8,232.12.

Asian markets ended mostly higher on Tuesday tracking an overnight rally in technology shares on Wall Street and after US President-elect Donald Trump denied a newspaper report that his team is looking into scaling back his promise to impose universal tariffs on imports. Japanese shares led regional gains as a weaker yen boosted export-related shares. Moreover, Chinese shares gained even after the United States' decision to blacklist several Chinese firms, including tech giant Tencent Holdings, alleging their involvement with the Chinese military. Although, investors are cautiously awaiting the minutes of the US Federal Reserve's December policy meeting due on Wednesday followed by the US non-farm payrolls report due on Friday.

Asian Indices

Last Trade            

Change in Points

Change in %      

Shanghai Composite

3,229.64

22.72

0.70

Hang Seng

19,447.58

-240.71

-1.24

Jakarta Composite

7,083.28

2.81

0.04

KLSE Composite

1,629.79

4.32

0.27

Nikkei 225

40,083.30

776.25

1.94

Straits Times

3,828.17

6.33

0.17

KOSPI Composite

2,492.10

3.46

0.14

Taiwan Weighted

23,651.27

103.56

0.44
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