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Informist, Friday, Mar. 21, 2025

By Gopika Balasubramanium

MUMBAI – Benchmark indices rose for the fifth consecutive session on Friday to end the week in green, shrugging off the weakness in early trade. The Nifty 50 notched its longest winning streak since early December and the BSE Sensex marked its longest winning run since the end of January. The indices had opened slightly lower, primarily due to losses in information technology stocks such as Infosys, Tata Consultancy Services, and HCL Technologies, which mirrored a fall in their US peer Accenture on disappointing earnings guidance revision. 

The Nifty 50 crossed the 23300 mark for the first time since Feb. 11 and the Sensex surpassed 77000 points for the first time since Feb. 12. The Nifty 50 closed at 23350.40 points, up 159.75 points or 0.7%. So far in March, the 50-stock index has closed higher in nine of the 14 trading sessions. The BSE Sensex closed at 76905.51 points, up 557.45 points or 0.7%. Stocks that led the rise of the Nifty 50 are heavyweights such as ICICI Bank and Reliance Industries, which together have more than 16% weightage in the Nifty 50. From a sectoral perspective, banks and financial services stocks rose the most and pushed the 50-stock index nearly 0.5% higher.

Shares of information technology stocks saw a 'knee-jerk' reaction following the lower-than-expected upward revision of Accenture's revenue growth guidance for the full year. However, most of these stocks recovered within an hour after the market opened. Accenture did not qualify or quantify any worry as such and it did not cut the revenue guidance, a research analyst at a domestic broking firm said. The only concern for Accenture, which receives a good share of revenue from the US government, is losing out on contracts as the US is looking to cut spending. 

Accenture's comments showed uncertainty about its outlook, the analyst said. Though IT stocks fell initially, investors then realised that Indian IT companies are unlikely to face similar issues as they do not have exposure to the US government and their valuations looked comfortable, given the recent moderation of stock prices in two months, the analyst said. 

This week, the market made a decent recovery from its recent losses. Some analysts attribute this rise to the improved domestic cues, such as comfortable valuations, a lower inflation print, cementing hopes of further rate cuts by the Reserve Bank of India and no tariff shocks from the US. That said, some analysts believe that the worst is behind while others believe that the market has still room to fall. Analysts also said the recent appreciation of the rupee is also driving the positive sentiment. 

Foreign investors will likely return to the Indian market when the dollar index falls below 100, a derivatives trader at a Delhi-based broking firm said. He said that the sell-off by foreign investors was due to narrowed returns because of the rupee's depreciation in recent months and their preference for a safer asset back home. He also believes the foreign investors are unhappy with the higher tax levied on their investments by India, such as the capital gains tax. 

In most global markets, foreign investors pay zero tax on stock market gains. "A quick back-of-the-envelope calculation here will tell you that if an FII invests INR 100 and earns INR 10, they lose INR 1.25 to LTCG (long-term capital gains) or INR 2 to STCG (short-term capital gains)," the analyst said. "So why park money in India when they can make more profits elsewhere," he said. In India, they are now subject to a 12.5% tax on equities held for over a year as long-term capital gains, and a 20% tax on short-term capital gains, he said.

In the Budget for 2024-25 (Apr-Mar), the government increased the long-term capital gains tax to 12.5% from 10% earlier and the short-term capital gains tax to 20% from 15% earlier. The government had also slightly raised the securities' transaction tax on futures and options to 0.02% and 0.1%, respectively.

Analysts are divided on the impact of US tariffs on the Indian market. While some believe the recent volatility and correction have already factored in all the 'negativity', others believe the investors will wait to see what happens on Apr. 2 when reciprocal tariffs come into effect.   More

Among sectoral indices, Nifty Oil & Gas closed nearly 2% higher. Analysts said the recent fall in Brent crude oil prices has given a boost to oil stocks and oil prices will continue to be steady in the near term, which bodes well for Indian oil-marketing companies. Shares of Hindustan Petroleum Corp., Bharat Petroleum Corp., and Indian Oil Corp closed 6%, 3%, and 2% higher, respectively. 

Shares of Bajaj Finance rose nearly 3% higher after the company's board approved the appointment of Anup Kumar Saha as managing director with effect from Apr. 1. Manappuram Finance hit a lifetime high of INR 247.60 and closed nearly 8% higher after various broking firms said the proposed entry of Bain Capital as a promoter was positive for the company. IDBI Capital Markets & Securities upgraded the stock rating to 'buy' from 'hold' and raised the target price by 26% to INR 252.

Shares of Jindal Stainless closed over 4% lower after the company said its Chief Financial Officer Anurag Mantri resigned with effect from Apr. 5. Voltas closed nearly 3% lower, declining for the second consecutive session. Prabhudas Lilladher downgraded the stock to 'accumulate' from 'buy' given the stock's recent run and retained the target price at INR 1,593. 

* Of the Nifty 50 stocks, 38 rose and 12 fell

* Of the Sensex stocks, 24 rose and 6 fell

* On the NSE, 2,120 stocks rose, 804 fell, and 64 were unchanged

* On the BSE, 2,823 stocks rose, 1,213 fell, and 126 were unchanged

* Nifty Media: up 2.2%; Nifty Oil & Gas: up 1.8%; Nifty Consumer Durables: down 0.8%

BSE                                               NSE

Sensex: 76905.51, up 557.45 points or 0.7%        Nifty 50: 23350.40, up 159.75 points or 0.7%

End

US$1 = INR 85.97

Edited by Saji George Titus

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