Sensex climbs 350 pts to 75,700; Financials, IT gain, BSE Mid, Smallcap decline

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Indian benchmark equity indices BSE Sensex and Nifty50 opened higher on Tuesday, amid mixed global cues and wider macroeconomic and international trade related concerns.

At opening bell, the BSE Sensex was higher by 370.49 points, or 0.49 per cent, at 75,736.66, and the Nifty50 was at 22,935.25, up 106.10 points, or 0.46 per cent.

After the opening bell, on the 30-stock BSE Sensex, 21 stocks were trading higher, with gains led by Axis Bank (up 1.66 per cent), followed by Bajaj Finance, IndusInd Bank, Infosys, and HDFC bank, while losses were capped by Sun Pharma (down 2.16 per cent), followed by Mahindra & Mahindra, Power Grid Corp., NTPC, and UltraTech Cement.

On the Nifty50, 27 stocks were trading higher, while the rest declined. Gains were led by Shriram Finance (up 2.50 per cent), followed by Axis Bank, Bajaj Finance, HDFC Bank, and Tata Steel, while losses were capped by Sun Pharma (down 2.54 per cent), followed by Dr Reddy’s, Mahindra & Mahindra, Coal India, and Cipla.

Across sectors, the PSU Bank index was the top gainer, climbing 2.04 per cent, while other frontline indices, including Nifty Bank, Financial Services, and Realty were trading higher by around 1 per cent, while the IT, Metal, and Private Bank indices were also in the green.

On the flip side, the Healthcare and Pharma indices were the top drags, falling 1.50 per cent 1.45 per cent, respectively, while the FMCG index was lower by 0.36 per cent. The Auto index was also marginally lower by 0.02 per cent.

The broader market indices were mixed, with the Nifty Smallcap 100 declining 0.97 per cent and the Nifty Midcap 100 climbing 0.07 per cent.

In Monday’s trading session, global AI and semiconductor stocks came under heavy selling pressure — dragging frontline indices lower across regions — after Chinese startup DeepSeek’s generative AI model emerged as a viable and inexpensive alternative to what has largely been a US tech companies dominated space.

The sell-off in tech stocks saw AI chipmaker Nvidia lose close to $600 billion in market cap on Monday, the biggest drop for any company on a single day in US history. The chipmaker’s stock price plummeted 17 per cent to close at $118.58.

The sell-off was sparked by concerns that Chinese artificial intelligence lab DeepSeek is presenting increased competition in the global AI battle.

The sell-off was apparent in the tech-heavy Nasdaq’s fall of 3.1 per cent on Monday, and the S&P 500’s decline of 1.46 per cent. Earlier in the day in India, the Nifty IT index had closed lower by 3.36 per cent, amid wider weakness in the markets. In contrast, the Dow Jones climbed 0.65 per cent at close.

While DeepSeek’s emergence is expected to keep investors on their toes regarding the widely-bought into AI-boom narrative, uncertainty about wider macroeconomic factors, including the Donald Trump-led administration’s tariff policies, and inflation, are expected to keep markets jittery.

Closer home, the continued selling by foreign portfolio investors (FPIs) is expected to continue pressuring benchmark indices.

The market rout in India had deepened on Monday, with key indices falling to their lowest levels since June 6 last year as foreign portfolio investors (FPIs) extended their selling streak amid concerns over an earnings growth slowdown. Global market volatility, fuelled by uncertain US policies and the potential impact of Chinese ChatGPT rival DeepSeek, further dampened investor sentiment.

The Sensex plunged 824 points, or 1.1 per cent, to close at 75,366, while the Nifty 50 dropped 263 points, or 1.1 per cent, to 22,829 — their lowest closing levels since June 6 last year. The Nifty 50 closed below the 23,000 mark for the first time since June 7.

Broader markets suffered steeper losses, with the Nifty Smallcap 100 index tumbling 4 per cent and the Nifty Midcap 100 shedding 3 per cent. The fear gauge, India VIX, surged 8.3 per cent to 18.13, reflecting heightened volatility. READ MORE

In the same vein, weakened market conditions have emboldened bears to launch targeted attacks on individual stocks. In recent weeks, shares of several high-profile companies, including Cyient, Kalyan Jewellers, Motilal Oswal Financial Services, and Ola Electric Mobility, have seen over a fifth of their value erode within days. Market insiders reveal that bears are homing in on vulnerable stocks with lofty valuations, promoter share pledging, and negative news triggers.

In other news, the Reserve Bank of India (RBI) on Monday announced a three-pronged measure to address tight liquidity conditions in the banking system, just 10 days before the six-member Monetary Policy Committee’s decision on the repo rate. These steps, according to bankers, are expected to inject about Rs 1.5 trillion into the system, reducing the likelihood of further cash reserve ratio (CRR) cuts. Experts believe these steps towards boosting liquidity raise the likelihood of an interest rate cut in the February 5-7 monetary policy review. READ MORE

Separately, the Union finance ministry has asked public-sector banks (PSBs) to intensify expanding the coverage of government-backed affordable life insurance schemes under its financial-inclusion initiative, according to a senior government official.

Also, Reserve Bank of India (RBI) Governor Sanjay Malhotra flagged the rise in digital frauds while emphasising the need for robust and proactive systems to thwart such attempts during his first interaction with managing directors and chief executive officers (CEOs) of public and private sector banks after taking charge. He also directed banks to enhance oversight over third-party service providers to mitigate risks and strengthen customer service and grievance redress mechanisms.

Elsewhere, credit information bureau TransUnion CIBIL warned on Monday that the trend of rising defaults in consumption-led loans — credit cards, personal loans, and consumer durable loans — in India risks spreading to secured credit, i.e., loans with collateral. Balance-level serious delinquencies (measured as 90 days or more past due) by product improved for secured loan products but deteriorated for consumption-led loans. READ MORE

In the primary markets, meanwhile, there is no activity scheduled in the mainline section, in the SME section, H.M. Electro Mech Limited IPO and GB Logistics Commerce Limited IPO will see their last day of subscription window, and the basis of allotment for GB Logistics Commerce Limited IPO will get finalised today.

In the Asia-Pacific region, while markets in Australian, Taiwan, South Korean and China are closed for the Lunar New Year holiday, stocks in Hong Kong rose after Wall Street saw a massive drop in shares of tech companies.

Hong Kong’s Hang Seng Index traded 0.17 per cent higher, while Japan’s Nikkei 225 dropped 0.65 per cent and the Topix lost 0.41 per cent.

Japan’s chip-related stocks extended losses for a second day. Advantest lost 9.66 per cent. Tokyo Electron fell 4.05 per cent, while Renesas Electronics dipped 1.54 per cent.

In the previous day’s trading session in markets globally, US technology shares dropped sharply on Monday as surging interest in Chinese startup DeepSeek’s low-cost artificial intelligence model raised doubts about the sector’s lofty valuations.

The tumble in global equities prompted a widespread flight to safety, with US government bonds rising and safe-haven currencies – the yen and Swiss franc – surging.

DeepSeek, which overtook rival ChatGPT to become the top-rated free application on Apple’s App Store in the US, says it uses lower-cost chips and less data, challenging a bet in markets that AI will drive demand along a supply chain from chipmakers to data centers.

The CBOE Volatility Index, known as Wall Street’s fear gauge, jumped 20 per cent.

In Europe, the pan-European STOXX 600 index was little changed, but the STOXX Europe 600 technology index fell more than 3 per cent, its biggest one-day drop since mid-October. MSCI’s gauge of stocks across the globe fell about 1 per cent.

US Treasury yields tumbled to multi-week lows, tracking steep declines in equities, as investors sought the safety of government bonds.

The benchmark US 10-year yield dropped 9.1 basis points to 4.532 per cent. That pushed the dollar lower, with safe-haven currencies as the main beneficiaries.

The dollar fell nearly 1 per cent against the yen and 0.4 per cent against the Swiss franc, two currencies that often gain during periods of market unease.

The dollar index, which measures how the US currency trades versus a basket of peers, declined 0.3 per cent, around its lowest level since Dec. 18.

US import tariffs remain a key theme, with President Donald Trump so far refraining from implementing broad trade levies.

China, Mexico and Canada are facing a nervy wait after Trump last week earmarked Feb. 1 for additional tariffs on top trading

partners.

The dollar also rose 0.4 per cent against the Colombian peso after a short-lived spat over deportations. On Sunday, Trump threatened Colombia with tariffs and sanctions to punish it for refusing to accept military flights carrying deportees, but Colombia later said it would accept repatriation flights and the U.S. sanctions threat was put on hold.

Monday’s market volatility kicks off a busy week in which both the US Federal Reserve and the European Central Bank meet to set interest rates.

“The Fed is likely to keep rates steady, and markets have embraced our view of higher-for-longer rates,” BlackRock Investment Institute strategists wrote in a note on Monday.

“We think the ECB has more room for further cuts,” they added. “Yet like in the US, we see structural constraints keeping inflation and rates higher than pre-pandemic.”

Oil prices fell about 2 per cent on Monday as the deal with Colombia reduced immediate concern over oil supply disruptions.

Gold prices declined more than 1 per cent, retreating from near-record highs seen in the last session, as investors liquidated bullion positions, along with a broader market sell-off sparked by DeepSeek.

Leading cryptocurrency bitcoin slumped 3.5 per cent, dropping below $100,000 for the first time in a week before rebounding to $101,455.

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