Sensex, Nifty trade lower amid foreign fund outflows

Indian equity indices made cautious start on the first day of the new calendar year 2025 and soon turned volatile with muted volumes as world markets remain shut for the New Year holiday. Now, Sensex and Nifty are trading lower amid foreign fund outflows. Data from the National Securities Depository showed that India experienced a drastic drop in Foreign Portfolio Investment (FPI) inflows in 2024, with net investments falling by 99 per cent compared to the previous year. The data highlighted that the net FPI inflows came down from Rs 1.71 lakh crore in 2023 to just Rs 2,026 crores in 2024. Some cautiousness came as the government data showed that the output of eight key infrastructure sectors slowed down to 4.3 per cent in November 2024 against 7.9 per cent growth registered in the same month last year. On a monthly basis, the production growth of these sectors last month rose to a four-month high. 

On the global front, Asian markets remained closed on account of Happy New Year. On the sectoral front, auto stocks are in focus amid December sales data. In stock specific development, SJVN rallied as it signed a pact with the Bihar government to develop the 1,000 MW Hathidah Durgawati Pumped Storage Project and other similar projects.

The BSE Sensex is currently trading at 77945.77, down by 193.24 points or 0.25% after trading in a range of 77901.02 and 78272.98. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.16%, while Small cap index was up by 0.26%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.29%, Industrials up by 0.25%, IT up by 0.14%, TECK up by 0.10% and FMCG up by 0.02%, while Realty down by 0.90%, Metal down by 0.76%, Bankex down by 0.60%, Auto down by 0.54% and Basic Materials down by 0.50% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 0.61%, Asian Paints up by 0.50%, Infosys up by 0.30%, HCL Technologies up by 0.26% and Mahindra & Mahindra up by 0.17%. On the flip side, Adani Ports down by 1.39%, NTPC down by 0.97%, ICICI Bank down by 0.96%, Ultratech Cement down by 0.90% and Tata Steel down by 0.80% were the top losers.

Meanwhile, expressing optimism over India’s exports growth, a report by economic think tank Global Trade Research Initiative (GTRI) stated that the country’s overall exports of goods and services in 2024 has estimated to cross $814 billion, an increase of 5.58 per cent, over the country's merchandise and services exports stood at $768.5 billion in 2023. The report estimated that in 2024, merchandise exports are expected to reach $ 441.5 billion, showing a modest 2.34 per cent increase over $ 431.4 billion in the previous year. In contrast, the services exports are estimated to grow by 10.31 per cent to $ 372.3 billion, up from $ 337.5 billion in 2023.

GTRI Founder Ajay Srivastava said India's export landscape is undergoing a transformation that highlights both opportunities and vulnerabilities. He added sectors such as machinery and electronics are gaining prominence, with machinery's share in the export basket rising to 6.9 per cent in 2024 from 3.8 per cent in 2014 and electronics climbing to 7.9 per cent in 2024 from 3.3 per cent in 2014. He said ‘These trends underscore India's growing capabilities in higher-value sectors, a necessary shift for long-term export resilience.

However, traditional sectors of exports are witnessing a decline. Textiles and garments, which accounted for 21.1 per cent of exports in 2004, now represent just 8 per cent, while gems and jewellery have dropped from 16.9 per cent in 2004 to 7.5 per cent in 2024. These declines not only reflect changing global demand but also point to India's struggle to remain competitive in labour-intensive industries. The new year poses significant challenges for Indian exports, he cautioned, adding that the global trade growth remains sluggish, hampered by slow economic recovery in developed markets and geopolitical tensions like the Russia-Ukraine war and the Israel-Hamas conflict. Disruptions in Red Sea shipping routes further exacerbate supply chain vulnerabilities.

The CNX Nifty is currently trading at 23568.70, down by 76.10 points or 0.32% after trading in a range of 23564.30 and 23683.60. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Apollo Hospital up by 1.37%, Asian Paints up by 0.57%, Larsen & Toubro up by 0.54%, Infosys up by 0.41% and Britannia Industries up by 0.24%. On the flip side, Bajaj Auto down by 2.44%, Adani Ports & SEZ down by 1.62%, Dr. Reddy's Lab down by 1.21%, Hindalco down by 1.09% and JSW Steel down by 0.95% were the top losers.