Markets Extend Losing Streak Amid Weak Earnings, FII Outflows; PSU Banks & Metals Shine
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The Nifty 50 closed below 23,050, while the Sensex dropped 122.52 points (0.16%) to 76,171.08, and the Nifty 50 lost 26.55 points (0.12%) to 23,045.25. Over the last six sessions, the Sensex and Nifty have declined 3.07% and 2.92%, respectively.
However, it is heartening for the bulls, to see that Nifty didn't break 23,000 mark.
Sectoral & Broader Market Performance
- Decliners: Real estate, energy, and auto stocks dragged the indices down.
- Gainers: Public sector banks and metal stocks showed resilience. The bank stocks are expected to move up in view more Repo rate cuts in the near future.
- Mid & Small Caps: The broader market underperformed, with the BSE Mid-Cap index down 0.45% and the BSE Small-Cap index fell, 0.49%.
Key Drags on the Market:
- Mahindra & Mahindra (-3.20%)
- ITC (-2.14%)
- Reliance Industries (-1.53%)
Market breadth remained weak, with 1,534 stocks advancing and 2,435 declining on the BSE. The India VIX, a measure of market volatility, rose slightly by 0.16% to 14.90.
Economic Indicators;
- Retail Inflation: India’s CPI-based inflation dropped to a five-month low of 4.31% in January 2025, down from 5.22% in December 2024 and 5.1% in January 2024, mainly due to falling food prices.
- Industrial Growth: India’s IIP growth slowed to 3.2% in December 2024, down from 5.2% in November 2024, with weaker manufacturing activity playing a key role.
Key Market Numbers:
- 10-Year Bond Yield: Up 1.67% to 6.811% (previous close: 6.806%).
- Indian Rupee Vs US Dollar: Weakened to Rs.86.9050, compared to Rs.86.7950 in the previous session.
- Gold (MCX Futures): Down 0.65% to Rs.84,968 (April 2025 contract).
- US Dollar Index (DXY): Up 0.06% to 107.98.
- US 10-Year Bond Yield: Added 0.22% to 4.547%.
- Brent Crude: Lost 0.95% to $76.27 per barrel (April 2025 contract).
Stocks in the Spotlight:
Gainers:
- Steel Authority of India (SAIL) (+5.64%) – Despite a 62.04% drop in net profit to ₹125.80 crore (YoY), revenue grew 4.9% to ₹24,489.63 crore.
- Pearl Global Industries (+11%) – Net profit surged 57.4%, revenue jumped 45.3% YoY.
- Indo Count Industries (+20%) – Net profit increased 30% to ₹75 crore, revenue also grew 30% YoY.
- Patel Engineering (+3.41%) – Net profit rose 14.49% YoY to ₹80.42 crore, revenue increased 13.61% YoY.
- IRCTC (+1.10%) – Net profit up 13.7% YoY to ₹341.09 crore, revenue up 9.79%.
- MOIL (+2.21%) – Net profit up 17.7% YoY to ₹63.68 crore, revenue increased 19.8%.
- NBCC (+0.67%) – Net profit up 25.41% YoY to ₹142.43 crore, revenue up 16.65%.
Losers:
- Vodafone Idea (-4.65%) – Reported a consolidated net loss of ₹6,609.3 crore, though revenue rose 4.16% YoY.
- Gensol Engineering (-14.50%) – Net profit fell 22.11% QoQ, revenue dipped 0.42% QoQ.
- Lupin (-2%) – Despite a 38.81% rise in net profit, stock declined.
- Tolins Tyres (-4.60%) – Revenue fell 7.63% YoY, despite a 1.20% rise in net profit.
- IRCON International (-6.04%) – Net profit down 64.81%, revenue declined 10.81% YoY.
- Gopal Snacks (-3.82%) – Net profit down 70.31% YoY, though revenue rose 7.07%.
IPO Update:
Hexaware Technologies:
- Subscribed 3% so far.
- IPO price band: ₹674 – ₹708 per share.
- Bidding closes on 14 February 2024.
Ajax Engineering:
- Oversubscribed 6.44 times.
- IPO price band: ₹599 – ₹629 per share.
- Bidding closes on 12 February 2024.
Global Market Impact
- US & European Markets: Affected by inflation concerns and interest rate speculation.
- Asian Markets: Showed mixed performance due to global uncertainty and US trade policies.
Conclusion
The Indian stock market continues to face downward pressure due to global economic uncertainties, weak corporate earnings, and FII outflows. While select sectors like PSU banks and metals have shown resilience, mid and small-cap stocks underperformed. The market awaits further cues from US economic policies, currency fluctuations, and domestic corporate earnings before stabilizing.
The Indian stock market has recently experienced a downturn, with the Nifty index closing below the 23,050 mark, marking its sixth consecutive day of losses. This decline is attributed to concerns over newly announced U.S. tariffs, a weakening rupee, disappointing domestic corporate earnings, and continued foreign institutional investor (FII) outflows. Sectors such as real estate, energy, and auto have faced declines, while public sector banks and metal companies have shown resilience.
Technical analysis suggests that the Nifty may find support in the 23,000 to 23,200 range. Zee Business Managing Editor Anil Singhvi anticipates a strong buy zone at 23,000-23,150 levels for the Nifty50 index. This indicates a potential stabilization point, as markets often consolidate after significant declines.
A critical event on the horizon is the upcoming summit between Prime Minister Narendra Modi and U.S. President Donald Trump, scheduled for February 13 in Washington, D.C. This meeting is pivotal, as both leaders aim to address trade tensions exacerbated by the U.S.'s recent imposition of reciprocal tariffs. India has proactively reduced duties on various products to ease tensions ahead of the talks.
The outcome of the Modi-Trump summit will be instrumental in shaping the market's trajectory. A positive resolution could bolster investor confidence, potentially leading to a market rebound. Conversely, unresolved trade disputes may prolong market volatility.
Investors are suggested to monitor developments from the summit closely. While technical indicators suggest potential support levels, the broader market sentiment will largely hinge on geopolitical outcomes and policy decisions stemming from the upcoming discussions.
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