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EQUITY
Post Session: Quick Review
Feb-05-2025

After witnessing a volatile day, Indian equity benchmarks ended Wednesday’s trading session below their neutral lines, as investors remained cautious ahead of the Reserve Bank of India's monetary policy meeting outcome this week. Sentiments remained negative as India’s services sector activity expanded at slowest pace in the month of January. Uncertainties over Trump’s tariff policies too kept traders away from risky assets. 

Some of the important factors in today’s trade:

India's services sector PMI slowdown at 56.5 in January: Traders were cautious as HSBC India Services PMI Business Activity Index eased to 56.5 in January from 59.3 in December. Further, the HSBC India Composite PMI Output Index -- which measures both manufacturing and services -- also fell to 57.7 in January as against 59.2 in December.

CPI inflation probably to drop to 4.5% in Q4FY25: Traders paid no attention towards a recent report by the State Bank of India (SBI) noted that the country's retail inflation is expected to decline to 4.5% in the last quarter (January-March) of the financial year 2024-25 (FY25), while the overall average inflation for the year is likely to be at 4.8%

Budget 2025 tax cuts to boost India's growth over next few years: Traders took note of S&P Global Ratings’ statement that the budget for 2025-26 will boost India's growth over the next few years via domestic demand through income tax cuts and the country will achieve the targeted 4.4 per cent fiscal deficit despite hiking I-T rebate.

Global front: European markets were trading lower, as investors react to downbeat earnings updates from Google parent Alphabet and AMD. Asian markets ended mixed, as private sector in Singapore fell into contraction territory in January, with a PMI score of 49.9. That's down from 51.5 in December, and it falls beneath the boom-or-bust line of 50 that separates expansion from contraction.

The BSE Sensex ended at 78271.28, down by 312.53 points or 0.40% after trading in a range of 78216.25 and 78735.41. There were 10 stocks advancing against 20 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index was up by 0.69%, while Small cap index up by 1.42%. (Provisional)

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.89%, Metal up by 1.55%, Energy up by 1.30%, Healthcare up by 1.21% and PSU up by 1.02%, while Realty down by 1.66%, FMCG down by 1.42%, Consumer Durables down by 1.21%, Consumer Disc down by 0.43% and Auto down by 0.14% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Adani Ports and Special Economic Zone up by 1.75%, Indusind Bank up by 0.90%, Tata Motors up by 0.89%, HDFC Bank up by 0.77% and Tata Steel up by 0.67%. On the flip side, Asian Paints down by 3.36%, Titan Company down by 2.95%, Nestle down by 2.19%, Hindustan Unilever down by 1.92% and SBI down by 1.71% were the top losers. (Provisional)

Meanwhile, Finance Minister Nirmala Sitharaman has said that the GST Council will soon take a decision on having fewer and lower rates as the review work is almost complete. She noted that currently, Goods and Services Tax (GST) is a four-tier tax structure with slabs at 5, 12, 18 and 28 per cent. Luxury and demerit goods are taxed at the highest bracket of 28 per cent, while packed food and essential items are in the lowest 5 per cent slab. 

The GST Council, chaired by Sitharaman and comprising her state counterparts, has set up a group of ministers (GoM) to suggest changes in GST rates as well as reduce slabs.  The minister said to be fair to the GST and the ministers who are all in the council, the work on rationalizing and simplifying GST rates has already commenced. In fact, it had commenced nearly three years ago. Days after presenting the Union Budget 2025-26 that also provides significant income tax relief to the middle class, she asserted the country's economic fundamentals are strong and there is no structural slowdown.  

Talking about capital expenditure, she further said the capex has not come down, in fact it has increased to Rs 11.21 lakh crore which is 4.3 per cent of the GDP. For fiscal 2025-26, the Budget proposed to spend Rs 11.21 lakh crore towards capital expenditure (capex), higher than Rs 10.18 lakh crore in the Revised Estimates for FY25. It was Rs 10 lakh crore in FY24, Rs 7.5 lakh crore in FY23, Rs 5.54 lakh crore in FY22 and Rs 4.39 lakh crore in FY21.

The CNX Nifty ended at 23696.30, down by 42.95 points or 0.18% after trading in a range of 23680.45 and 23807.30. There were 23 stocks advancing against 27 stocks declining on the index. (Provisional)

The top gainers on Nifty were ONGC up by 2.97%, Hindalco up by 2.85%, Apollo Hospital up by 2.24%, BPCL up by 2.07% and Adani Ports and Special Economic Zone up by 1.71%. On the flip side, Asian Paints down by 3.36%, Titan Company down by 2.97%, Nestle down by 2.20%, Hindustan Unilever down by 1.93% and Britannia Industries down by 1.90% were the top losers. (Provisional)

European markets were trading lower; Germany’s DAX lost 88.58 points or 0.41% to 21,417.12, France’s CAC fell 28.23 points or 0.36% to 7,878.17 and UK’s FTSE 100 decreased 3.55 points or 0.04% to 8,567.22.

Asian markets ended mixed on Wednesday as US tariff worries persisted and ahead of key US economic data, including the payrolls report due on Friday that could shed more light on the health of the US economy. Seoul shares gained on tracking overnight gains on Wall Street and as traders shrugged off data that showed South Korea's consumer inflation quickened to a six-month high in January. Japanese shares rose marginally, despite a stronger yen as upbeat wage and services PMI data raised expectations for more Bank of Japan interest rate hikes this year. Chinese shares declined after the US Postal Service announced a temporary suspension of parcel shipments from China and Hong Kong -- a move that highlighted the risks of an escalating trade war. A private survey showed China’s service activity expanded at a slower pace in January.

Asian Indices

Last Trade            

Change in Points

Change in %      

Shanghai Composite

3,229.49

-21.11

-0.65

Hang Seng

20,597.09

-192.87

-0.94

Jakarta Composite

7,024.23

-49.23

-0.70

KLSE Composite

1,547.51

9.95

0.64

Nikkei 225

38,831.48

33.11

0.09

Straits Times

3,815.37

-7.64

-0.20

KOSPI Composite

2,509.27

27.58

1.10

Taiwan Weighted

23,161.58

367.62

1.59
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