IGI Logo

Indian equity markets snapped two day losing streak on Tuesday as traders preferred to buy stock at lowest levels. Today, markets are likely to make negative start amid weak cues from other Asian markets. Traders may be cautious as FIIs continued their selling spree, offloading shares worth Rs 1,491.46 crore on January 7. Meanwhile, with growth in the Indian economy estimated to slow to a four-year low of 6.4 per cent in FY25, falling short of the Reserve Bank of India’s (RBI’s) projection of 6.6 per cent, according to the First Advance Estimates released by the National Statistics Office (NSO), might weigh on sentiment. In FY24, gross domestic product (GDP) had grown at 8.2 per cent. Separately, driven by a slowdown in government capital expenditure and sluggish private investments, growth in infrastructure investment is expected to moderate in the current financial year (FY25) compared to FY24, according to the first Advance Estimates of gross domestic product (GDP) for FY25. However, the fiscal deficit for 2024-25 (FY25) may remain within the target, despite a lower-than-budgeted nominal gross domestic product (GDP) growth of 9.7 per cent, as indicated in the First Advance Estimates released on Tuesday by the National Statistics Office (NSO). Meanwhile, the National Stock Exchange (NSE) is set to add six more stocks in the F&O segment, with effect from January 31, 2025. The stocks to be added are Castrol India, Gland Pharma, NBCC, Phoenix Mills, Solar Industries and Torrent Power. There will be some buzz in banking stocks as India Ratings said Indian banks’ profitability is expected to moderate in FY26 after reaching an inflexion point in FY25, due to delinquencies from over-leveraging of unsecured assets and an increase in unsecured credit costs. Auto stocks will be in focus as data shared by the Federation of Automobile Dealers Associations (FADA) stated that all categories except tractors witnessed degrowth, with sales of two wheelers dipping by 18 per cent, passenger vehicles by 2 per cent, commercial vehicles (CV) by 5.2 per cent and three wheelers by 4.5 per cent. There will be some reaction in IT stocks with a private report that Indian IT service providers are set to take centre stage as earnings season unfolds. For Q3FY25, the sector is expected to show a year-on-year (Y-o-Y) revenue improvement. According to Bloomberg consensus estimates, the top four IT firm - Tata Consultancy Services (TCS), Infosys, HCL Technologies, and Wipro - are projected to report Y-o-Y growth ranging between 0.1 per cent and 7 per cent.

US markets end lower on Tuesday amid US Treasury yields edged higher after data showed the American economy remained resilient, indicating the Federal Reserve could cut interest rates fewer times this year than the market had been expecting. Markets in the Asia-Pacific region were mostly lower amid losses on Wall Street. 

Back home, Indian equity benchmarks snapped two-day losing streak and ended in green on Tuesday as investors awaited the first advance estimates of gross domestic product (GDP) for FY25, for more directional cues. The key indices opened higher, driven by favorable global cues. Traders took encouragement with Prime Minister Narendra Modi’s statement after US National Security Advisor Jake Sullivan met him that the India-US comprehensive global strategic partnership has scaled new heights, including in areas of technology and defence. However, markets erased some gains in morning deals, amid cautiousness after detection of human metapneumovirus (HMPV) in India. India has reported at least five cases of HMPV, which causes respiratory illness and was recently identified in China and Malaysia. Two cases were detected in Karnataka, two in Tamil Nadu, and one in Gujarat. Some concern came with exchange data showing that Foreign Institutional Investors (FIIs) offloaded equities worth Rs 2,575.06 crore on Monday. However, markets regained some traction in late morning deals and witnessed range-bound price action for rest part of the day as traders took support with domestic rating agency ICRA’s report stating that securitization volumes jumped 80 per cent on-year to Rs 68,000 crore in the December quarter (Q3FY25), and has also upped its estimates on total volumes for this financial year (FY25). The financial system is estimated to witness securitization deals, where a lender passes on future receivables to another stakeholder against upfront cash, of around Rs 2.4 lakh crore, up from the previously estimated Rs 2.1 lakh crore. The new estimate represents a 25 per cent increase over the Rs 1.92 lakh crore in FY24. Sentiments were positive amid a private report stating that the Centre is expected to release the next instalment of special assistance to states even if they have not met capital expenditure targets. In July 2024, the Centre increased the budgetary allocation under the programme to Rs 1.5 lakh crore, a significant rise from Rs 1.05 lakh crore in the previous fiscal. Finally, the BSE Sensex rose 234.12 points or 0.30% to 78,199.11, and the CNX Nifty was up by 91.85 points or 0.39% to 23,707.90.      

Above views are of the author and not of the website kindly read disclaimer