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Informist, Tuesday, Jan. 14, 2025

By Anshul Choudhary

MUMBAI – Benchmark indices closed slightly higher after declining for the past four sessions. However, stocks continued to face selling pressure at higher levels amid a poor outlook for the December quarter earnings and uncertainty over interest rates in the US and India. 

Benchmark indices witnessed a slight breather from the sell-off on Monday, when the Nifty 50 and the Sensex fell around 1.5% each to their respective seven-month lows. On Tuesday, the Nifty 50 rose to an intraday high of 23264.95 points, but came off highs to close at 23176.05 points, up 0.4%. The Sensex closed 0.2% higher at 76499.63 points.

In a positive development for markets, India's CPI inflation moderated to a four-month low of 5.22% in December from 5.48% in November. This has raised hopes that the Reserve Bank of India may bring down interest rates soon, but economists remain cautious considering the recent selling pressure on the rupee. 

"Although inflation is trending lower, but it is still elevated, hence the decision of policy easing in Feb-25 would be a close call. Other than growth and inflation dynamics, defending the currency is one of RBI's main task hence in a scenario where USD (US dollar) is expected to strengthen, RBI would want to stretch its rate easing cycle," JM Financial Institutional Securities, said in a note.

Metal and energy companies were some of the top gainers on the Nifty 50. These recovered slightly after the sharp fall seen in the past four sessions. Within metal companies, Hindalco Industries, Tata Steel, and JSW Steel closed 2.5-5.0% higher. Shares of energy companies such as NTPC and JSW Energy were up 4-6%.

Shares of Adani group companies rose sharply Tuesday. Shares of Adani Enterprises closed 7% higher, and those of Adani Power, Adani Green Energy, and Adani Energy Solutions closed 12-19% higher. Share volume surged for several Adani group stocks, with the volume of Adani Power up 850% compared with Monday, and that for Adani Green Energy and Adani Energy Solutions up over 500% each.

Some of the financial stocks had a great day in the market after reports emerged that the government has approved a plan to divest its stake in five banks. CNBC-TV18, quoting sources, reported that the government has allowed five state-owned banks, including Indian Overseas Bank, Central Bank of India, UCO Bank, Punjab & Sind Bank, Bank of Maharashtra, to raise a total of INR 100 billion through qualified institutional placement. All of these stocks ended 13-18% higher, with most of the gains coming in the final hour of the session. Owing to this, Nifty PSU Bank snapped a four-session losing run and rose nearly 4%.

Among some large-cap banks, shares of index-heavyweight State Bank of India rose 2.6%. Shares of IndusInd Bank rose over 2% amid reports that its weightage in the MSCI index may rise. JM Financial said IndusInd Bank's weightage in the MSCI index may be doubled, resulting in buying of $143 million, which is about 2.9 times the average trading volume of the stock. MSCI is scheduled to announce changes to its indices on Feb. 11, after market hours.

On the downside, shares of information technology companies fell after HCL Technologies reported lower-than-expected sales growth in the December quarter, which pushed investors to sell the stock owing to a high valuation. Several brokerages raised concerns around the stock's high valuation, with Nuvama Institutional Equities even downgrading the stock to 'hold' discerned by valuation. Shares of HCL Technologies fell nearly 9% to INR 1,813.55--its lowest closing level in over two months.

Shares of most IT stocks traded weak after HCL Technologies' earnings, which came out on Monday after market hours. Shares of LTIMindtree, L&T Technology Services, and Persistent Systems were down 2-5%. Owing to this, the Nifty IT index fell for the second session and ended 2% down. 

Mid-caps and small-caps saw some recovery after being hammered on Monday. The Nifty Midcap 150 rose 2.2% and the Smallcap 250 ended 1.6% higher. Both indices are still down 6.0-7.5% so far this month and about 12% from their respective lifetime highs.

* Of the Nifty 50 stocks, 34 rose and 16 fell

* Of the Sensex stocks, 19 rose and 11 fell

* On the NSE, 2,117 stocks rose, 700 fell, and 65 were unchanged

* On the BSE, 2,867 stocks rose, 1,096 fell, and 110 were unchanged

* Nifty PSU Bank: up 4.2%; Nifty Metal: up 4%; Nifty IT: down 2.1%

BSE                                               NSE

Sensex: 76499.63, up 169.62 points or 0.2%        Nifty 50: 23176.05, up 90.10 points or 0.4%

End

Edited by Tanima Banerjee

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