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Informist, Friday, Jan. 17, 2025

By Alina Geogy

MUMBAI – Benchmark indices snapped a three-day winning streak on Friday on uncertainty about policy changes in the US after President-elect Donald Trump assumes office on Monday, a rise in crude oil prices, and likely outflows by foreign institutional investors, analysts said.

Banking and information technology stocks fell sharply and dragged the Nifty 50 down as much as 0.9% to an intraday low of 23100.35 points earlier in the day. The two sectors, with a 49% weight in the index, contributed the most to the decline of the Nifty 50 on Friday. The Nifty 50 closed off lows at 23203.20 points, down 0.5%. The Sensex closed at 76619.33 points, down 0.6%.

Market participants are taking a cautious approach ahead of Trump's swearing-in and are weighing the prospects of tariff hikes and corporate tax cuts, analysts said. Measures such as higher tariffs are expected to add to the inflationary pressures in the US, they said. The US Fed is widely expected to keep rates unchanged at its monetary policy meeting later in the month, according to the CME FedWatch Tool.

Investors heavily sold shares of Axis Bank and Infosys, making them the worst hit Nifty 50 constituents. Both had announced their earnings for the December quarter after the market closed on Thursday. Shares of Axis Bank fell to its lowest level in over a year and ended down 4.5% after the bank's net profit for Oct-Dec missed estimates. Other heavyweight banking stocks, ICICI Bank and HDFC Bank, which ended 1.9% and 0.9% lower, respectively, also weighed on the index.

Shares of Infosys fell 5.9% and were the worst hit in the 50-stock index despite the company's consolidated net profit for the December quarter beating estimates. Shares of sectoral competitors Tata Consultancy Services and Wipro closed around 2% lower each. The Nifty IT index closed 2.7% lower owing to losses in these stocks and became the worst performing sectoral index. Information technology stocks fell amid concerns about earnings growth in the coming quarters as some major players reported softer-than-expected order inflows for the December quarter.

Shares of Reliance Industries closed up nearly 3% after the company posted an over 7% on-year growth in consolidated net profit for the December quarter. The bottom line not only beat analysts' estimates, but also posted year-on-year growth for the first time in four quarters. Its consolidated revenue also beat expectations, rising around 7% on year on the back of improved performance in the retail and oil-to-chemical businesses. Gains in the stock helped limit the fall of the Nifty 50.

Among other stocks, shares of SBI Life Insurance closed up nearly 2% after the company's net profit for the December quarter rose more than 70% on year to INR 5.51 billion. Shares of Bharat Dynamics ended up 6.2% and were the top gainer in the Nifty 200 index after the company signed a contract with the defence ministry to supply medium-range surface-to-air-missiles to the Indian Navy at a cost of around INR 29.60 billion.

Most broader market indices recovered from intraday losses and closed higher. Except for the Nifty Smallcap 250 index, the Nifty small- and mid-cap indices ended 0.1-0.2% higher. Over 50% of all NSE-traded stocks ended higher while 46% ended lower.

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

* Of the Sensex stocks, 15 rose and 15 fell

* On the NSE, 1,472 stocks rose, 1,338 fell, and 94 were unchanged

* On the BSE, 2,056 stocks rose, 1,886 fell, and 123 were unchanged

* Nifty IT: down 2.7%; Nifty Private Bank: down 2.2%; Nifty Oil & Gas: up 1.6%

BSE                                               NSE

Sensex: 76619.33, down 423.49 points or 0.6%        Nifty 50: 23203.20, down 108.60 points or 0.5%

End

Edited by Saji George Titus

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