Sensex down 50 pts at 77,580; IT up 2%, Pharma, Health, Financials weigh

Indian benchmark equity indices BSE Sensex and Nifty50 were trading lower on Friday, amid a clouded global outlook.

At 11 AM, the BSE Sensex was lower by 133.54 points, or 0.17 per cent, at 77,486.67, and the Nifty50 was at 23,461.80, behind by 64.70 points, or 0.28 per cent.

After the opening bell, out of the 30 stocks on the BSE Sensex, only seven stocks, including TCS (up 4.48 per cent), followed by Tech Mahindra, Infosys, HCLTech, Bajaj Finserv, Nestle India, and Bajaj Finance, were trading higher, while the rest declined. Losses were capped by NTPC (down 2.98 per cent), followed by IndusInd Bank, Mahindra & Mahindra, Power Grid Corp., and UltraTech Cement.

The trend on the Nifty50 index was also similar, with seven stocks, including TCS (up 4.51 per cent), followed by Tech Mahindra, Wipro, Infosys, HCLTech, Bajaj Finserv, Nestle India, and Bajaj Finance, were trading higher, while losses were capped by Shriram Finance (down 5.19 per cent), followed by NTPC, Adani Enterprises, Hindalco Industries, and BEL.

Across sectors, barring the IT index, which was up 2 per cent, all other sectoral indices had declined around 1 per cent.

The Media index was the biggest drag, falling 2.32 per cent, followed by the PSU Bank index, which was down 1.67 per cent. The Pharma, Metal, and Auto indices were lower by 1.40 per cent, 1.40 per cent, and 1.35 per cent, respectively.

The Bank and Financial Services indices were down 0.93 per cent and 0.84 per cent, respectively.

In the broader markets, the Nifty Midcap 100 was lower by 1.77 per cent and the Nifty Smallcap 100 had shed 1.36 per cent.

While inflation, labour market concerns, and a likely higher-for-longer interest rate regime in the US drove Treasury yields higher there during a curtailed trading session on account of former US President Jimmy Carter’s funeral ceremony, concerns regarding the UK government’s finances also hit gilts, driving bond yields there to sixteen-and-half year highs, and taking the pound sterling towards its biggest three-day drop in nearly two years.

These developments in turn have pressured stocks globally, while clouding the outlook for investors as they await a number of global and domestic events on the horizon, including monthly employement data in the US today, the Federal Reserve’s policy setting meeting and President-elect Donald Trump’s inaugaration later in the month, along with the Indian central bank’s policy setting meeting in February.

Closer home, continued selling by foreign institutional investors (FIIs) has consistently put downward pressure on the markets here, while almost flatlining consumer prices in China makes for further downside risks.

While FIIs net sold Indian equities worth Rs 7,170.87 crore on Thursday, thier actions were counteracted by net buying of shares worth Rs 7,639.63 crore by domestic institutional investors during the trading session..

Meanwhile, investors here searched for a silver lining in companies reporting results from the December 2024 quarter, with the first one off the mark, IT bellwether TCS posting net profit for the third quarter, at Rs 12,380 crore, up 11.9 per cent YoY over Rs 11,058 crore in the same quarter of FY24. In Q3FY24 TCS had a one-time settlement of legal claims of Rs 958 crore. Taking this into consideration, net profit growth year-on-year (Y-o-Y) was 5.5 per cent. READ MORE

In other news, the Indian economy is expected to grow by 6.6 per cent in 2025 and 6.7 per cent in 2026, supported by solid private consumption and investment growth, according to the United Nations (UN) flagship report, World Economic Situation and Prospects 2025, released on Thursday. READ MORE

Separately, before the Budget 2025-26 is presented on February 1, the central government has asked industry associations, legal players and regulatory representatives to suggest ways to further improve the business climate for overseas investors to boost the flow of foreign direct investment (FDI) — which has been on a decline for the last three years. READ MORE

Elsewhere, the rupee on Thursday slipped to 85.94 against the dollar intraday, a fresh low, before recovering some losses to close the day at 85.86, flat compared to Wednesday’s closing. Due to the heightened hedging activity by foreign investors and robust demand for dollars, three-month non-deliverable forward (NDF) points for the dollar-rupee pair has been trading at its highest since November 2022, according to Bloomberg data. The rupee has been trading with a depreciation bias, hitting new lows over the past few weeks. READ MORE

Moreover, India Ratings on Thursday said that any broad-based or strong recovery in corporate capital expenditure was unlikely in the upcoming financial year 2026 (FY26) due to uncertainty of domestic and external demand. READ MORE

On the positive side of things, the excess earnings of unlisted companies over and above their interest costs are at a record level. The interest-coverage ratio of 2.94 is the highest going back to 1990-91, according to numbers from the Centre for Monitoring Indian Economy (CMIE). The analysis is based on the data on 4,231 unlisted companies for 2023-24 (FY24) — what is available as of December-end. READ MORE

Also, fundraising by Indian corporates through equity and debt reached all-time high in the calendar year 2024, according to primedatabase.com. The overall public equity fundraising stood at Rs 3.7 trillion in 2024, a rise of 159 per cent from Rs 1.4 trillion in 2023. If Rights Issues of Rs 25,973 crore were to be added, the overall equity fundraising would touch nearly Rs 4 trillion in 2024. READ MORE

In another pocket of the markets, equity mutual funds (MFs) capped a strong 2024 with near-record inflows in December. With net inflows of Rs 41,156 crore in December, the 2024 tally surged to Rs 3.9 trillion, up 144 per cent compared to 2023. READ MORE

Elsewhere, Reliance Industries’ (RIL’s) core business is expected to once again drag earnings for the oil-to-telecom conglomerate in the third quarter of the current financial year (Q3FY25), said analysts. RIL is slated to declare its financial results for Q3FY25 on January 16. READ MORE

However, as volatility in the capital markets continues to pose a challenge to equity investors, and the possibility of interest rate cuts become more likely, taking a balanced approach to investment through aggressive hybrid schemes of mutual funds may offer a prudent path forward for investors. READ MORE

In another news, two of the six-step measures introduced by the Securities and Exchange Board of India (Sebi) to curb the frenzy in index derivatives will now take effect from February 10, instead of February 1, according to a notice by the National Stock Exchange (NSE).

The upfront collection of option premiums and the removal of calendar spread treatment on the expiry day will come into effect from February 10. Three other measures are already in place and have led to a significant decline in the total volumes of futures and options trades.

These include one weekly contract per exchange, Extreme Loss Margin (ELM), and higher contract size.

In the primary markets, meanwhile, Quadrant Future Tek IPO (Mainline), Capital Infra Trust IPO (Mainline), Avax Apparels IPO (SME), Delta Autocorp IPO (SME) and BR Goyal IPO (SME) will see their allotment, and Barflex Polyfilms IPO (SME) and Sat Kartar IPO (SME) will open for subscription.

In the previous trading session, benchmark equity indices BSE Sensex and Nifty50 had settled in the negative territory on Thursday. The Sensex shed as much as 528.28 points or 0.68 per cent to settle at 77,620.21, while the Nifty50 ended lower by 162.45 points or 0.69 per cent at 23,526.50.

Broader markets also mirrored the benchmarks as the Nifty Smallcap100 and Nifty Midcap100 indices ended down by 0.93 per cent, and 1.35 per cent, respectively. All sectors ended in the red, barring the Nifty FMCG index. Among others, IT, PSU Bank index, financial services, consumer durables, and OMCs ended down by over 1 per cent each. Meanwhile, the Nifty Realty index ended lower by 2.73 per cent.

Meanwhile, on Friday, markets in the Asia-Pacific were mixed as investors assessed the November pay and household spending data out of Japan.

Real household spending in Japan fell 0.4 per cent year on year in November, a softer fall compared to the 0.6 per cent decline expected by a Reuters poll of economists, and also also less than the 1.3 per cent decline seen in October. Separately, the average real income per household stood at 514,409 yen ($3,252.98) in November, up 0.7 per cent from the previous year.

Japan’s Nikkei 225 fell 0.66 per cent, and the broad-based Topix declined 0.52 per cent.

South Korea’s Kospi fell 0.41 per cent, while the small-cap Kosdaq was down 1.07 per cent.

Australia’s S&P/ASX 200 also slipped 0.64 per cent.

Hong Kong’s Hang Seng index was higher by 0.4 per cent, and the CSI 300 was marginally ahead by 0.03 per cent. The Shanghai Composite was higher by 0.07 per cent.

US Treasury yields retreated from an eight-month high on Thursday while the dollar strengthened against major currencies, as investors reevaluated the Federal Reserve’s interest rate policy for 2025 as the US economy shows signs of resilience.

The benchmark 10-year US Treasury yield fell 0.45 basis points to 4.689 per cent. It had hit a peak of 4.73 per cent on Wednesday, the highest since April 2024. The pound headed for its biggest three-day drop in nearly two years.

A selloff in global bonds in recent weeks and worries about Britain’s economy has kept the pound under pressure and also has

hit gilts especially hard, driving yields to 16-1/2-year highs.

On Friday, the closely watched US monthly payrolls report will provide clues on the Fed’s policy outlook. Markets are fully pricing in just one 25-basis-point US rate cut in 2025.

Minutes of the Fed’s December policy meeting released on Wednesday showed officials were concerned President-elect Donald Trump’s proposed tariffs and immigration policies may prolong the fight against inflation.

A market selloff in Treasuries continued on Wednesday after a CNN report that Trump was considering declaring a national economic emergency to provide a legal justification for a series of universal levies on allies and adversaries.

US stock markets were closed on Thursday to mark the funeral of former US president Jimmy Carter. US bond markets closed early at 1900 GMT.

European shares finished higher after paring early losses. Gains in healthcare and basic materials stocks were partially offset by declines in retailers. The pan-European STOXX 600 closed up 0.42 per cent.

The US dollar index traded just under 109.54, a level it hit last week for the first time since November 2022. The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.12 per cent to 109.15, with the euro down 0.18 per cent at $1.0299.

Sterling was last down 0.44 per cent at $1.2307, having touched its lowest since November 2023 earlier in the day.

China’s yuan steadied near a 16-month low against the dollar as the nation’s central bank announced a record amount of offshore yuan bill sales to support the currency.

Oil prices settled up more than 1 per cent as cold weather gripped parts of the US and Europe, boosting winter fuel demand.

Brent crude futures settled up 1 per cent at $76.92 a barrel. US West Texas Intermediate crude futures settled up 0.82 per cent to $73.92.

Gold prices advanced to a near four-week high, backed by safe-haven demand. Spot gold rose 0.27 per cent to $2,669.38 an ounce, trading near its highest level since mid-December. US gold futures rose 0.77 per cent to $2,685.00 an ounce.