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Markets end volatile day in red terrain
Jan-10-2025

Indian equity benchmarks ended the volatile day of trade in red terrain on Friday amid weak global cues coupled with rising US dollar and bond yields. Sentiments remained dampened on account of continues outflow of foreign capital from Indian markets and fall in Indian rupee against the US dollar.

Some of the important factors for the markets:

Traders eyed IIP & CPI: Traders were cautious ahead of key macroeconomic data i.e. India Industrial Production (IIP) due later today and Consumer Price Index (CPI) going to be out on Monday.

Q3 earnings remained in focus: Traders and investors remained cautious ahead of the December quarter earnings. India's IT bellwether Tata Consultancy Services (TCS) reported its December quarter (Q3) numbers on Thursday, January 9, which were largely in line with market expectations.

Centre released Rs 1.73 lakh crore to States towards tax devolution: The Union Government has released tax devolution of Rs 1,73,030 crore to State Governments, as against the devolution of Rs 89,086 crore in December 2024. A higher amount is being devolved this month to enable states to accelerate capital spending and finance their development and welfare-related expenditures.

Rising US bond yields, dollar: Strong US macro data and dwindling expectations of a large rate decrease by the US Fed this year have caused US benchmark 10-year bond rates and the dollar to rise. Today, US Treasury rates were close to eight-month highs. Since high bond yields and a strong currency cause foreign capital to flee emerging markets like India, this has been a huge drawback.

Global markets: Asian stocks ended mostly in red as the U.S. jobs report loomed, China growth worries persisted, and traders remained on alert for a rising risk of Japanese authorities intervening to support the yen. European stocks struggled for direction as bond yields remained elevated ahead of the all-important U.S. jobs report due later in the day.

Finally, the BSE Sensex fell 241.30 points or 0.31% to 77,378.91, and the CNX Nifty was down by 95.00 points or 0.40% to 23,431.50.   

The BSE Sensex touched high and low of 77,919.70 and 77,099.55 respectively. There were 8 stocks advancing against 22 stocks declining on the index.           

The broader indices ended in red; the BSE Mid cap index fell 2.13%, while Small cap index was down by 2.40%.

The only gaining sectoral indices on the BSE were IT up by 2.65% and TECK up by 2.24%, while Power down by 3.07%, Utilities down by 2.86%, Realty down by 2.64%, PSU down by 2.47% and Healthcare down by 2.37% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 5.67%, Tech Mahindra up by 3.63%, HCL Technologies up by 3.13%, Infosys up by 2.55% and Bajaj Finserv up by 0.55%. On the flip side, Indusind Bank down by 4.41%, NTPC down by 3.78%, Ultratech Cement down by 3.57%, SBI down by 2.26% and Sun Pharma down by 2.25% were the top losers.

Meanwhile, Credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has forecasted that fiscal 2026 (FY26) will be a year of headwinds for the credit market, led by externalities, length and breath of indebtedness in the retail lending space, volatile banking system liquidity and domestic growth-inflation conundrums.

According to the report, liquidity has improved on a year-to-date basis in the current fiscal, while it will remain volatile in the next fiscal and will act as a deterrent for commercial banks in terms of addressing adverse loan-to-deposit ratios and asset liability pricing. Subsequently, volatility in the banking system may have an impact on domestic money market.

The rating agency further noted that spreads of non-banking financial companies are likely to increase further with the rising uncertainties over asset quality and it also expects moderate-to-strong deterioration in various asset classes during the year. 

It said therefore, it is obvious that the credit premium would inch up in the financial sector, applicable for both bank and capital market lending. Ind-Ra further stated that while NBFCs’ asset quality could weaken, corporates’ asset quality might remain resilient with minor moderation.

The CNX Nifty traded in a range of 23,596.60 and 23,344.35. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were TCS up by 5.60%, Tech Mahindra up by 3.59%, HCL Technologies up by 3.22%, Infosys up by 2.53% and Wipro up by 2.51%. On the flip side, Shriram Finance down by 5.30%, Indusind Bank down by 4.29%, Adani Enterprises down by 3.95%, NTPC down by 3.79% and Bharat Electronics down by 3.72% were the top losers.

European markets were trading mostly in green; France’s CAC rose 18.59 points or 0.25% to 7,508.87 and Germany’s DAX gained 43.1 points or 0.21% to 20,360.20, while UK’s FTSE 100 decreased 18.31 points or 0.22% to 8,301.38.

Asian markets settled mostly down on Friday on caution ahead of US December jobs report later today, which may provide clues on the Federal Reserve's interest rate trajectory. Markets sentiments weakened further as 10-year US Treasury yields hovered around nine-month highs after Fed officials are signalled concerns that President-elect Donald Trump's trade and immigration policies could stoke inflation. Seoul shares declined due to profit taking from recent gains mainly in technology shares. Chinese shares fell and the yuan slipped to a new 16-month low as the People's Bank of China halted its government bond purchases amid record-low bond yields. Moreover, Japanese markets dropped amidst Fed and BoJ policy uncertainties.

Asian Indices

Last Trade            

Change in Points

Change in %      

Shanghai Composite

3,168.52

-42.87

-1.35

Hang Seng

19,064.29

-176.60

-0.93

Jakarta Composite

7,088.87

24.28

0.34

KLSE Composite

1,602.41

1.60

0.10

Nikkei 225

39,190.40

-414.69

-1.06

Straits Times

3,801.56

-61.04

-1.61

KOSPI Composite

2,515.78

-6.12

-0.24

Taiwan Weighted

23,011.86

-69.27

-0.30
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