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Key gauges continue to trade lower in morning deals
Jan-09-2025

Indian equity benchmarks continued to trade lower in morning deals, dragged by persistent foreign fund outflows, with investors staying on the sidelines ahead of the earnings season. TCS is kick-starting the December quarter results calendar on Thursday. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,362.18 crore on Wednesday, according to exchange data. Traders overlooked Agricultural and Processed Food Products Export Development Authority (APEDA) Chairman Abhishek Dev’s statement that Indian exporters have huge opportunities to increase their share in the global agriculture trade from the current 2.4 per cent. The global agriculture trade is about $2 trillion. He said that given these numbers, ‘huge opportunities’ are there to increase exports from the country. Separately, the Department for Promotion of Industry and Internal Trade on Wednesday held consultations with stakeholders, including law firms, on ways to further improve the business climate for overseas investors and attract more FDI into the country. On the global front, Asian markets are trading mostly in red as investors fretted the Federal Reserve could delay policy easing due to inflation worries, while China’s entrenched consumer disinflation further dented sentiment.

The BSE Sensex is currently trading at 77866.03, down by 282.46 points or 0.36% after trading in a range of 77846.43 and 78206.21. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.00%, while Small cap index was down by 0.11%.

The top gaining sectoral indices on the BSE were FMCG up by 1.75%, Basic Materials up by 0.28%, Auto up by 0.23%, IT up by 0.12% and TECK up by 0.10%, while Oil & Gas down by 1.05%, Capital Goods down by 1.01%, Energy down by 0.94%, Industrials down by 0.76% and PSU down by 0.68% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 2.77%, Nestle up by 2.14%, Mahindra & Mahindra up by 2.03%, ITC up by 1.66% and Kotak Mahindra Bank up by 0.92%. On the flip side, Larsen & Toubro down by 2.65%, Tata Motors down by 2.19%, HDFC Bank down by 1.34%, Ultratech Cement down by 1.20% and Tata Steel down by 1.09% were the top losers.

Meanwhile, Rating agency CRISIL has said that steel prices in 2025 would be much higher than the last year if the proposed safeguard duty on steel imports is imposed by the end of next month. Vishal Singh, Director-Research at CRISIL Market Intelligence and Analytics, said ‘Domestic prices are under pressure due to global steel price decline and are expected to remain soft in 2025. Prices have a 4-6 per cent upside potential hinged on implementation of the safeguard duty. as mills ramp up production volume from the newly commissioned capacities, increase in supply will reduce flat steel prices, but will still be higher than average price of 2024. That said, intense competition among mills to gain market share could limit the upward movement.’ 

The imposition of a safeguard duty proposed by the industry could be a positive. Assuming it is implemented by the end of February, steel prices in 2025 would be much higher than 2024, with the impact more prominent in the first half. Last year, steel prices in the domestic market declined due to additional availability of the metal backed by an increase in net imports. Hot-rolled coil (HRC) prices declined nine per cent and cold rolled coil prices declined seven per cent, thereby slowing topline growth of domestic mills. However, falling coking coal prices, along with low volatility, have helped domestic steel producers reduce margin pressure to some extent.

Coking coal spot price for the premium low volatility grade, Australia-origin, declined 12 per cent in 2024, whereas iron ore prices are estimated to have increased by 9-10 per cent during the period. Notably, China HRC export prices declined 12 per cent in 2024 and are still trading at a discount to domestic mill prices. Further, the rating agency said that domestic steel demand will continue to outpace other major steel consuming economies in the current year with a growth of 8-9 per cent due to shift towards steel-intensive construction in the housing and infrastructure sectors along with better demand from engineering, packaging and other segments.

Besides, in 2024, global steel demand is estimated to have declined one per cent. Demand in China, the largest steel producer and consumer, declined 3.5 per cent, led by declining steel demand from the real estate sector, despite conducive policy changes and release of support packages. Steel demand from Europe, Japan and the US also logged an estimated de-growth of 2-3 per cent. However, it said demand growth in developing economies such as India and Brazil kept global demand from declining steeply. Demand is estimated to have increased 11 per cent in India, 5.6 per cent in Brazil and 2.7 per cent in other steel consuming economies.

The CNX Nifty is currently trading at 23617.80, down by 71.15 points or 0.30% after trading in a range of 23593.95 and 23689.50. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Britannia Industries up by 2.92%, Hindustan Unilever up by 2.69%, Bajaj Auto up by 2.61%, Nestle up by 2.07% and Mahindra & Mahindra up by 1.95%. On the flip side, Larsen & Toubro down by 2.68%, Tata Motors down by 2.20%, ONGC down by 1.69%, HDFC Bank down by 1.20% and Ultratech Cement down by 1.18% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 462.33 points or 1.16% to 39,518.73, Taiwan Weighted lost 290.8 points or 1.24% to 23,116.53, Straits Times fell 21.27 points or 0.55% to 3,865.71 and Shanghai Composite weakened 7.21 points or 0.22% to 3,222.96.

On the flip side, Hang Seng advanced 2.87 points or 0.01% to 19,282.71, KOSPI increased 4.26 points or 0.17% to 2,525.31 and Jakarta Composite gained 3.02 points or 0.04% to 7,083.37.
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