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EQUITY
Key gauges end lower amid volatility
Feb-05-2025

In a volatile session, Indian equity benchmarks altered between positive and negative terrains and finally ended lower on Wednesday as investors turned cautious ahead of the RBI's monetary policy decision later this week. Global trade war concerns also fuelled risk aversion among investors. Profit-taking after Tuesday’s rally and the rupee plunging to record low levels also hit markets sentiment. 

Some of the important factors in today’s trade:

India services sector PMI edged down in January: India's services sector activity expanded at the slowest pace in over two years in January amid softer increases in sales and output. The seasonally adjusted HSBC India Services PMI Business Activity Index fell from 59.3 in December to 56.5 in January, its lowest level since November. 

Sliding rupee remained a concern: Indian rupee made a new low against the US dollar and plunged by 36 paise to 87.43 (provisional) against the US dollar, as global trade war concerns fuelled risk aversion among investors. 

Focus shifted to RBI policy decision: Investors remained cautious ahead of the Reserve Bank of India's monetary policy meeting this week. There are expectations of a 25 basis-points rate cut in benchmark policy rates, which will be the first in five years, as inflation remains within the central bank's comfort zone.

FIIs turned net buyers: Traders got support as exchange data showed Foreign Institutional Investors (FIIs) turned buyers on Tuesday after unabated selling for the past many days. They bought equities worth Rs 809.23 crore.

Global front: European markets were trading lower even as S&P Global said in a report that private sector activity in the euro area rose in January. The composite Purchasing Managers' Index (PMI) inched up to 50.2 from 49.6 in December. Asian markets ended mixed on Wednesday as tariff worries persisted, and a private survey showed China's services activity expanded at a slower pace in January. 

Finally, the BSE Sensex fell 312.53 points or 0.40% to 78,271.28, and the CNX Nifty was down by 42.95 points or 0.18% to 23,696.30.      

The BSE Sensex touched high and low of 78,735.41 and 78,216.25 respectively. There were 9 stocks advancing against 21 stocks declining on the index.

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

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 Discretionary down by 0.43% and Auto down by 0.14% were the top losing indices on BSE.

The top gainers on the Sensex were Adani Ports &SEZ up by 1.60%, Indusind Bank up by 1.20%, Tata Motors up by 0.91%, HDFC Bank up by 0.89% and Tata Steel up by 0.75%. On the flip side, Asian Paints down by 3.38%, Titan Company down by 3.02%, Nestle down by 2.23%, Hindustan Unilever down by 2.03% and Larsen & Toubro down by 1.72% were the top losers.

Meanwhile, in a bid to provide easy credit for MSME exporters, Director General of Foreign Trade (DGFT) Santosh Kumar Sarangi has said that the government is formulating schemes which will promote alternate financing instrument through strengthening factoring services and offer assistance to deal with non-tariff measures imposed by other countries.  

These schemes are being formulated under the export promotion mission, announced in the Union Budget for 2025-26. In Union Budget for 2025-26, the government has planned an Export Promotion Mission with an outlay of Rs 2250 crore, under which these schemes are being formulated to promote India’s exports. The schemes are expected to be rolled out in about 4-5 months.

The Export factoring services are widely used financing instrument globally. However, due to high factoring costs involving higher rates of interest, higher risk premiums and lack of parity with subvention schemes these services have low adoption in India. Sarangi said the cross-border factoring should attain a certain scale to reach about 3 per cent of merchandise exports (in line with the global average).

The CNX Nifty traded in a range of 23,807.30 and 23,680.45. There were 25 stocks advancing against 25 stocks declining, while 1 stock remained unchanged on the index. 

The top gainers on Nifty were Hindalco up by 2.90%, ITC Hotels up by 2.88%, ONGC up by 2.74%, Apollo Hospital up by 2.44%, BPCL up by 2.19%. On the flip side, Asian Paints down by 3.40%, Titan Company down by 2.99%, Nestle down by 2.17%, Britannia Industries down by 1.96% and Tata Consumer Products down by 1.86% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 3.84 points or 0.04% to 8,566.93, France’s CAC fell 24.78 points or 0.31% to 7,881.62 and Germany’s DAX lost 45.27 points or 0.21% to 21,460.43.

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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