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Sensex, Nifty slip below neutral lines after positive start
Jan-08-2025

Indian equity benchmarks made slightly positive start on Wednesday but soon slipped below neutral lines amid weak global cues. Sensex and Nifty are trading in red with cut of around 0.30% each in early deals. Sustained foreign fund outflows dented domestic sentiments. FIIs offloading shares worth Rs 1,491.46 crore on January 7. Traders were also concerned as the First Advance Estimates released by the National Statistics Office (NSO) estimated that Indian economy to slow to a four-year low of 6.4 per cent in FY25, falling short of the Reserve Bank of India’s (RBI’s) projection of 6.6 per cent. In FY24, gross domestic product (GDP) had grown at 8.2 per cent. Separately, driven by a slowdown in government capital expenditure and sluggish private investments, growth in infrastructure investment is expected to moderate in the current financial year (FY25) compared to FY24.

On the global front, Asian markets are trading mixed as fresh signs of a resilient U.S. economy clouded the outlook for U.S. rate cuts in 2025. Treasuries were steady after falling across the curve in the previous session. The U.S. government's monthly auction of 10-year notes drew the highest yield since 2007 after the release of upbeat U.S. service-sector activity and job openings data.

Back home, IT stocks are trading under pressure ahead of earnings season unfolds. As per a private report, for Q3FY25, the sector is expected to show a year-on-year (Y-o-Y) revenue improvement. The report said the top four IT firm - Tata Consultancy Services (TCS), Infosys, HCL Technologies, and Wipro - are projected to report Y-o-Y growth ranging between 0.1 per cent and 7 per cent.

The BSE Sensex is currently trading at 77984.29, down by 214.82 points or 0.27% after trading in a range of 77899.89 and 78319.45. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.93%, while Small cap index was down by 0.93%.

The few gaining sectoral indices on the BSE were Oil & Gas up by 0.82%, Energy up by 0.82% and Bankex up by 0.01%, while Consumer Durables down by 2.32%, Consumer discretionary down by 0.99%, Industrials down by 0.95%, IT down by 0.93% and FMCG down by 0.82% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 1.29%, Axis Bank up by 0.88%, Kotak Mahindra Bank up by 0.33%, ICICI Bank up by 0.21% and Maruti Suzuki up by 0.19%. On the flip side, Zomato down by 2.02%, Titan Company down by 1.50%, Tata Motors down by 1.19%, Infosys down by 1.10% and Adani Ports & SEZ down by 1.04% were the top losers.

Meanwhile, the National Statistics Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI) in its the First Advance Estimates of Annual Gross Domestic Product (GDP) for the Financial Year (FY) 2024-25 has showed that India's economic growth rate is estimated to slip to a four-year low of 6.4 per cent in 2024-25, mainly on account of poor showing by the manufacturing and services sector. The gross domestic product (GDP) rate of 6.4 per cent will be the lowest since the Covid year (2020-21) when the country witnessed a negative growth of 5.8 per cent. It was 9.7 per cent in 2021-22; 7 per cent in 2022-23 and 8.2 per cent in the last fiscal ended in March 2024.

The estimate is lower than the 6.6 per cent projected by the Reserve Bank in December 2024. It is also a tad lower than the finance ministry's initial projection of 6.5-7 per cent. The advance estimates will be used in preparation for the Union Budget to be presented by Finance Minister Nirmala Sitharaman in the Lok Sabha on February 1. The economic growth slowed to a seven-quarter low of 5.4 per cent during the July-September period. It was 6.7 per cent in the first quarter (April-June).

NSO said the manufacturing sector output is expected to decelerate to 5.3 per cent from a high of 9.9 per cent recorded in the previous fiscal. The services sector, comprising trade, hotels, transport and communications, is estimated to expand at 5.8 per cent against 6.4 per cent in 2023-24. On the other hand, the farm sector is estimated to record a growth of 3.8 per cent in the current fiscal, up from 1.4 per cent in 2023-24.

According to the data, nominal GDP (GDP at current prices) is estimated to attain a level of Rs 324.11 lakh crore in 2024-25 compared to Rs 295.36 lakh crore in 2023-24, showing a growth rate of 9.7 per cent. Further, the nominal Gross Value Added (GVA) is estimated to attain a level of Rs 292.64 lakh crore in 2024-25 against Rs 267.62 lakh crore in 2023-24, showing a growth rate of 9.3 per cent. 

Private Final Consumption Expenditure (PFCE) at constant prices has witnessed a growth rate of 7.3 per cent during 2024-25 over the growth rate of 4 per cent in the previous financial year. Government Final Consumption Expenditure (GFCE) at Constant Prices has rebounded to a growth rate of 4.1 per cent compared to the growth rate of 2.5 per cent in the previous fiscal. NSO also said the per capita income (at current prices) is estimated to increase by 8.7 per cent to Rs 2,00,162 per annum. It was Rs 1,84,205 in the preceding fiscal.

The CNX Nifty is currently trading at 23,633.40, down by 74.50 points or 0.31% after trading in a range of 23,622.20 and 23,751.85. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Dr Reddy’s up by 1.85%, ONGC up by 1.58%, Reliance Industries up by 1.13%, Axis Bank up by 0.86% and Bajaj Finserve up by 0.43%, while Trent down by 2.26%, Shriram Finance down by 1.73%, Adani Ports and Special Economic Zone down by 1.60%, Bharat Electronics down by 1.46% and Britannia Industries down by 1.44%.

Asian markets are trading mixed; Hang Seng declined 312.38 points or 1.61% to 19,135.20, Taiwan Weighted lost 191.8 points or 0.81% to 23,459.47, Shanghai Composite weakened 47.16 points or 1.48% to 3,182.48 and Nikkei 225 was down by 13.04 points or 0.03% to 40,070.26. On the other hand, KOSPI rose 30.28 points or 1.22% to 2,522.38, Straits Times added 25.16 points or 0.66% to 3,853.33 and Jakarta Composite was up by 1.69 points or 0.02% to 7,084.97.
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