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Informist, Friday, Jan. 3, 2025

By Alina Geogy

MUMBAI – The benchmark indices Friday gave up nearly half of the gains chalked up the previous day. However, analysts said the indices merely took a breather and that they would rise next week. Weakness in shares of some information technology companies and banks weighed on the indices. The broader market indices, which had outperformed the benchmark ones in early trade, followed suit and snapped their winning streak.

"This is just a minor correction happening, but the trend remains positive and hopefully the rally seen yesterday can continue," a research analyst at a domestic brokerage firm said. Retail-chain operators and automobile manufacturers have posted better-than-expected data, and this is a major positive ahead of the December quarter earnings, he said.

During the day, the Nifty 50 briefly dipped below the psychological 24000-point level, which it had surpassed after nearly two weeks on Thursday. The 50-stock index ended the session marginally above this level at 24004.75 points, down 0.8% from the previous close. Meanwhile, the Sensex failed to close above 80000 points which it crossed mid-session for the second day in a row. The 30-stock index closed at 79223.11 points, down 0.9%. With this, both the Nifty 50 and Sensex erased nearly half of Thursday's gains of 1.9% and 1.8%, respectively.

The Nifty small-cap indices snapped a three-day winning streak and most Nifty mid-cap indices snapped a winning run that lasted four sessions. The Nifty Smallcap 50, the worst hit among the broader market indices, was down 0.6%.

The Nifty 50 was dragged down by fall in banking stocks HDFC Bank and ICICI Bank and IT stocks Infosys and Tata Consultancy Services. The Nifty Bank and Nifty IT closed down more than 1% each and were among the worst-hit sectoral indices. Shares of IT companies fell due to uncertainty about US president-elect Donald Trump's likely policy changes and worries that companies could post weaker-than-expected earnings for the December quarter, analysts said.

On the other hand, Oil and Natural Gas Corp., Tata Motors, and index heavyweight Reliance Industries were the ones that supported the indices most from falling any further. ONGC rose over 5% to a near one-month high and was the top gainer among Nifty 50 constituents. The stock rose after a rise in prices of crude oil and bullish comments by foreign broking firm Jefferies. The price of crude oil futures rose for the fifth straight day Friday, but fell slightly later. On Thursday, Brent crude futures expiring in March traded on the Intercontinental Exchange had crossed the $76-per barrel mark for the first time in nearly two months. At 1635 IST, the contract traded at $75.63 a barrel, down 0.4%.

Jefferies maintained a 'buy' rating on ONGC for a target price of INR 375, according to media reports. This target price implies an upside of over 50% from the previous close. The 30% correction in the stock over the past three months appears overdone, Jefferies said, as per the reports.

Shares of automobile companies that had surged Thursday displayed a mixed trend Friday. Shares of Eicher Motors, Maruti Suzuki India, and Tata Motors were among the only ones from the sector to end in the green. Several auto firms, such as Eicher Motors and Maruti Suzuki, posted robust growth in vehicle sales for December. Shares of Tata Motors closed 3.3% higher, extending its gains for the fourth consecutive session. Meanwhile, shares of two-wheeler maker Hero MotoCorp closed nearly 2% lower after the company said its sales volume declined 17.5% on year in December.

Among the Nifty 200 index constituents, Avenue Supermarts and Bank of Maharashtra were the top gainers. Shares of Avenue Supermarts rose 11.5% after the company said its revenue for Oct-Dec rose 17.5% on year. The stock had surged over 15% during the day after the strong quarterly update. Shares of Bank of Maharashtra closed higher by 4.5% after the bank said its total business for the quarter ended December grew nearly 17% on year as of Dec. 31, as per provisional data. Total deposits of the bank rose 13.5% on year as of Dec. 31.

Shares of power financiers REC and Power Finance Corp. rose over 3% and 5%, respectively, after Emkay Global Financial Services initiated coverage on them with a 'buy' rating. However, both stocks failed to sustain gains and closed off their highs. Shares of IndusInd Bank closed 0.7% up after having risen as much as 3.4% around noon after brokerage firm CLSA reiterated its 'overweight' rating on the stock. However, the broking firm expects lower growth for the bank in the medium term.

Among broader market stocks, ITI hit the 20% upper circuit of INR 457.10 and was the best performer in the Nifty 500 index. The stock's volume surged and was the highest in nearly a month. Saregama India was another stock among the top-gaining Nifty 500 constituents as it closed up over 15%. On the flipside, shares of Zomato and Tanla Platforms fell over 4% each and were the worst hit.

* Of the Nifty 50 stocks, 21 rose and 29 fell

* Of the Sensex stocks, 13 rose and 17 fell

* On the NSE, 1,470 stocks rose, 1349 fell, and 84 were unchanged

* On the BSE, 2,117 stocks rose, 1,869 fell, and 117 were unchanged

* Nifty IT: down 1.4%; Nifty Pharma: down 1.2%; Nifty Media: up 1.7%

BSE                                               NSE

Sensex: 79223.11, down 720.60 points or 0.9%      Nifty 50: 24004.75, down 183.90 points or 0.8%

End

Edited by Ashish Shirke

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