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Informist, Friday, Jan. 24, 2025

By Akash Mandal

MUMBAI – The benchmark indices ended lower Friday after a volatile session that saw oil and gas, automobile, and banking and other financial services stocks decline. Some analysts believe the increased volatility was a result of domestic investors possibly joining foreign investors in selling off equity holdings.

The Nifty 50 ended at 23092.20 points, down 113.15 points or 0.5%, and the BSE Sensex closed at 76190.46 points, down 329.92 points or 0.4%. The broader market indices underperformed the benchmarks, with the Nifty small- and mid-cap indices declining 1.3-2.8%. The weakness in the broader market is going to persist as the earnings for the December quarter have been underwhelming, an analyst tracking the broader markets at a domestic brokerage said.

Dhananjay Sinha, head of research, equities, at Systematix Institutional Equities, shared a similar view. Sinha said China has been dumping cheap goods into emerging markets such as India amidst uncertainty over sanctions by the US. This dumping is seen especially in sectors such as chemicals, speciality chemicals, and agricultural materials. This will further hurt small- and mid-cap companies as they cannot compete with substantially cheaper Chinese goods. On Friday, shares of all fertiliser and chemical companies declined, with Gujarat State Fertilizers & Chemicals falling almost 4%.

Oil and gas stocks were among the worst hit, with all constituents of the Nifty Oil & Gas index ending in the red. Shares of Oil India, Aegis Logistics, Bharat Petroleum Corp., and Mahanagar Gas ended almost 3-6% lower. Of all the sectoral indices, only those pertaining to the information technology and fast-moving consumer goods sectors gained.

Index heavyweights HDFC Bank and Reliance Industries closed around 1% lower each, weighing the most on the Nifty 50. The Shriram Finance stock could not sustain the gains it made briefly after the company declared a healthy financial result for the December quarter in the last half hour of trading and ended 0.4% lower. The non-banking finance company reported a consolidated net profit of INR 35.70 billion, beating analysts' expectations of INR 23.99 billion, on a total income of 107.05 billion.

Most pharmaceutical and healthcare stocks also fell, with shares of Dr. Reddy's Laboratories declining more than 5% after the company's earnings for the December quarter missed the Street's view. After market hours Thursday, the drugmaker had reported a consolidated net profit of INR 14.14 billion, lower than the INR 14.73 billion expected by analysts, on a revenue of INR 83.81 billion. Shares of Mankind Pharma, Glenmark Pharmaceuticals, and Gland Pharma also declined over 4%. Shares of Cipla lost nearly 3%. Laurus Labs was the sole gainer among the 20 stocks in the Nifty Pharma index. Most automobile stocks also fell, with shares of large-caps Mahindra & Mahindra and Tata Motors falling 3% and 2.5%, respectively.

Among other stocks, shares of Cyient plunged more than 23% after the company's Oct-Dec consolidated net profit, at INR 1.22 billion, missed analysts' expectations. The company's chief executive officer and executive director Karthikeyan Natarajan also resigned. Shares of Tejas Networks also fell almost 11% after the company's net profit for the December quarter fell 40% sequentially, while its revenue fell 6%. Shares of Prestige Estates Projects and Polycab India, down around 7% and 5%, respectively, were among the worst-hit Nifty 200 constituents.

Meanwhile, shares of FMCG majors Hindustan Unilever and Britannia Industries rose nearly 2% each and were the top gainers in the Nifty 50. Shares of Mphasis recovered from initial losses and ended 3% higher after the company's consolidated net profit for Oct-Dec exceeded analysts' expectations. The stock recovered from its day's lows after the company's post-earnings call with analysts, where the management said it expects sequential revenue growth in the March quarter to be the highest in three years. The company expects to grow faster than the industry during the year, gaining from improving conversions of total contract value to revenue and strong deal wins.

Shares of Capri Global Capital surged more than 10% after its net profit for the reporting quarter doubled on year. Shares of KFin Technologies ended 5.5% higher after being up more than 13% during the session. The company's net profit for the December quarter grew 38% on year to INR 910.44 million and revenue rose 34% on year to INR 2.82 billion.

* Of the Nifty 50 stocks, 18 rose and 31 fell, 1 was unchanged

* Of the Sensex stocks, 11 rose and 19 fell

* On the NSE, 635 stocks rose, 2,183 fell, and 73 were unchanged

* On the BSE, 1,083 stocks rose, 2,902 fell, and 119 were unchanged

* Nifty Media: down 2.6%; Nifty Realty: down 2.3%; Nifty FMCG: up 0.5%

BSE                                                 NSE

76190.46 points, down 329.92 points or 0.4%         23092.20 points, down 113.15 points or 0.5%

End

Edited by Rajeev Pai

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