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Informist, Tuesday, Feb. 4, 2025

By Akash Mandal

MUMBAI – Benchmark indices ended sharply higher Tuesday amid short covering in the market, bouncing back emphatically after the decline on Monday. Strong gains in bank stocks led the gains in the Nifty 50, with HDFC Bank rising 2.6%. ICICI Bank, Axis Bank, Kotak Mahindra Bank, and State Bank of India also rose 1-3%. Other blue chip heavyweights such as Reliance Industries, Infosys, and Larsen & Toubro also ended 2-5% higher.

Sentiment was positive in the market after US President Donald Trump suspended the 25% additional tariff on Mexico and Canada. While the US markets ended lower Monday, most Asian markets traded higher Tuesday following the announcement. However, Trump stayed firm upon the tariffs imposed on China, which in retaliation imposed their own tariffs against the US. 

The Nifty 50 ended at 23739.25 points, up 378.20 points or 1.6%, and the BSE Sensex closed at 78583.81 points, up 1397.07 points or 1.8%. These indices had declined 0.5% and 0.4%, respectively, on Monday. Broader market indices also recovered, with the Nifty Smallcap and Nifty Midcap indices ending 1-2% higher. The India VIX closed at a near one-month low of 14.02, down over 2%. 

Brijesh Ail, head of technical and derivatives analysis, said short covering was a major contributor to the gains seen in the session. "Currently, the foreign institutional investors in index futures are heavily short, with only 10% long positions," Ail said. 

Barring the Nifty FMCG, all other sectoral indices ended in the green. The Nifty Oil & Gas led the gains among the sectoral indices, with all stocks in the index closing higher. Aegis Logistics and Indian Oil Corp. ended around 12% and 3% higher, respectively. Castrol India rose more than 6% after its net profit for the December quarter beat analysts' estimates. 

Defence and capital goods stocks recovered from the sharp decline on Saturday and Monday on disappointment related to a modest increase in the capex for 2025-26 (Apr-Mar). "These (defence and capital goods) stocks had fallen on the back of geopolitical tensions and high valuations post the disappointing capex announcement by the government...however, we are still positive on these sectors due to orders that already exist," said Vanitha Poojari, research analyst at Maximus Securities. Shares of Techno Electric & Engineering Co., ABB India, Bharat Heavy Electricals, and Bharat Electronics surged 4-12%.

Public sector banks also rose, with all stocks in the Nifty PSU Bank ending higher. Union Bank of India, Indian Bank, Bank of India, and Canara Bank gained 2.5-4.5%. Nifty Consumer Durables recovered to end higher after being in the red earlier in the session. Most of the stocks in the index ended lower, but the index gained on the back of Kalyan Jewellers India surging over 12% and Amber Enterprises India rising nearly 6%. 

The Nifty FMCG was the only sectoral index in the red, with investors likely booking profits, analysts said. The index had gained nearly 6% over a three-session period ended Saturday. Positive commentary by FMCG majors such as Tata Consumer Products and Nestle India had led these stocks to rise in the latter half of the previous week. FMCG stocks were pushed higher Saturday by Finance Minister Nirmala Sitharaman's announcement of an income tax exemption on income up to INR 1.2 million in the Union Budget. United Breweries, Godrej Consumer Products, and Britannia Industries fell 1.5-3.0%.

Among other specific stocks, Asian Paints ended nearly 3% higher despite its consolidated net profit of INR 11.10 billion for the December quarter missing analysts' estimates. NLC India rose almost 8% after its net profit for the quarter almost tripled on year. Techno Electric & Engineering Co. and Nuvama Wealth Management rose almost 12% and were among the top gainers in the Nifty 500. 

On other hand, shares of Tata Chemicals fell 3% after it reported a consolidated net loss for the second time in the last four quarters due to a one-time loss. Power Grid Corp. of India recovered and ended nearly 1% higher after being in the red in early trade. Its net profit and revenue for the December quarter declined on year, the fourth consecutive quarter of contraction. Shares of Trent plunged over 6% to end as the worst hit in the Nifty 50. 

Shares of Dr. Agarwal's Health Care listed at INR 402, flat against its issue price and plunged almost 8% to an intraday low of INR 370.20. The stock then recovered to end 0.1% lower.

* Of the Nifty 50 stocks, 40 rose and 10 fell

* Of the Sensex stocks, 26 rose and 4 fell

* On the NSE, 1,951 stocks rose, 863 fell, and 85 were unchanged

* On the BSE, 2,509 stocks rose, 1,410 fell, and 154 were unchanged

* Nifty Oil & Gas: up 2.7%; Nifty PSU Bank: up 2.4%; Nifty FMCG: down 0.3%

BSE                                                      NSE

Sensex: 78583.81 points, up 1397.07 points or 1.8%       23739.25 points, up 378.20 points or 1.6%

End

Edited by Akul Nishant Akhoury

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