More Stories

Informist, Monday, Jan. 6, 2025

By Anshul Choudhary

MUMBAI – The benchmark share indices fell sharply Monday as investors were disappointed by the quarterly updates of several companies ahead of the December quarter earnings. The Nifty 50 index fell 1.6% due to concerns that corporate earnings for Oct-Dec may be below expectations.

Shares of banks and non-banking financial services companies were among the worst-hit as credit growth of several banks was lower than expectations. Shares of consumer-facing companies, including fast-moving consumer goods, also suffered as their quarterly updates did not give hope of significant improvement in demand. The Nifty 50 closed at 23616.05 points, sharply below its immediate support of 23900 points at the start of the session. The Sensex ended 1,258.12 points or 1.6% lower at 77964.99 points.

"While there is a surety the quarter will be better than the previous quarter, the market is confused about the exact quantum," Narendra Solanki, head of fundamental research at Anand Rathi-Investment Services, said. "After these updates, the market seems to be worried that earnings growth may not recover to normal levels (of 12-15% for Nifty 50)...I think it (Nifty 50 earnings) may rise somewhere around high single digits (in Oct-Dec)."

The overall credit growth of banks has been slightly weaker than expected, Anand Dama, senior research analyst at Emkay Global Financial Services, said. India's largest private bank, HDFC Bank, reported a mere 3% year-on-year rise in gross advances at the end of the December quarter. Union Bank of India reported 5% growth in domestic advances.

Shares of the index-heavyweight HDFC Bank fell to their lowest level in over a month to INR 1,705.80 before closing at INR 1,710.50, down more than 2%. Among other large-caps, Union Bank of India fell 7.5%, Kotak Mahindra Bank and IndusInd Bank closed around 3% lower each.

Fast-moving consumer goods companies continued to suffer as quarterly updates made it somewhat clear that a significant recovery in demand is unlikely. Several companies last week reported a hit to volumes as they had to raise prices to offset the impact of higher commodity prices.

"We expect moderation in volume growth...(FMCG) companies may see volume growth of low to mid single digit in the quarter (Oct-Dec)," Amit Agarwal, senior vice-president of fundamental research at Kotak Securities, said. "Urban-focused companies seem to be struggling, while the rural-focused ones are likely to do better."

Within the FMCG space, shares of Dabur India fell nearly 4% after it said the revenue growth in the December quarter is likely to be in low single digit. Among other large-caps, shares of Nestle India fell over 2% and Hindustan Unilever were down over 1%.

Shares of ITC fell nearly 3% as they traded without the value of its demerged entity ITC Hotels. As part of an adjustment due to the demerger, exchanges conducted a special pre-open session for the stock after which the new price of ITC was discovered at INR 455.60, down INR 27 from Friday's close.

Shares of power and energy companies were down due to worries that the Central Electricity Regulatory Commission denying the proposed tariff for JSW Energy's battery energy storage project may have larger implications for the power and energy sector. JM Financial Institutional Securities said JSW Energy's older renewable projects are at a risk of further scrutiny by the regulator. Shares of the company closed lower by more than 5%.

"We consider this a highly negative development for the sector, which is already grappling with regulatory uncertainties and project delays," JM Financial said in a report.

Shares of Coal India, NTPC, and Adani Enterprises fell 3.5-3.8%. Among others, shares of INOX Wind, Adani Energy Solutions, NLC India were down over 6% each. The fall in energy stocks, along with the decline in banks and FMCG companies, led to an even sharper fall in mid-caps and small-caps. The Nifty Midcap 250 was down 2.5% and the Nifty Smallcap 250 was down nearly 3%.

There are some worries over the human metapneumovirus that has spread in China and even reached India with the Indian Council of Medical Research confirming two cases in Karnataka on Monday. Analysts are keeping a close watch on the news around the virus but are largely downplaying the impact for now.

Shares of pharmaceutical and healthcare stocks were down in view of the overall weakness in the market, with Natco Pharma down 4% and Biocon down 3%. At the same time, shares of Apollo Hospitals rose 1.8%.

* Of the Nifty 50 stocks, 4 rose and 46 fell

* Of the Sensex stocks, 2 rose and 28 fell

* On the NSE, 413 stocks rose, 2,473 fell, and 65 were unchanged

* On the BSE, 656 stocks rose, 3,474 fell, and 114 were unchanged

* Nifty PSU Bank: down 4%; Nifty Energy: down 3%; Nifty Realty: down 3%

BSE                                               NSE

Sensex: 77964.99, down 1258.12 points or 1.6%     Nifty 50: 23616.05, down 388.70 points or 1.6%

End

Edited by Ashish Shirke

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.