Key indices end lower on Thursday

09 Jan 2025 Evaluate

Indian equity benchmarks ended lower by over half percent on Thursday due to heavy selling in market heavyweights Larsen & Toubro, Tata Motors and HDFC Bank. After making a cautious start, key gauges slipped into red and extended losses as the day progressed as investors turned nervous over earnings growth concerns amid unabated foreign capital outflows. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,362.18 crore on Wednesday, according to exchange data. The Indian stock markets mirrored the decline across its Asian peers, with cautious investor sentiment driven by a sell-off in US bonds. The US 10-year Treasury yield surged to its highest level since April 2024, signalling expectation of fewer rate cuts by the Fed. Further, disappointing inflation data from China added pressure, indicating that recent stimulus measures have failed to rejuvenate one of the world's largest consumer markets.

Traders ignored Agricultural and Processed Food Products Export Development Authority (APEDA) Chairman Abhishek Dev’s statement that Indian exporters have huge opportunities to increase their share in the global agriculture trade from the current 2.4 per cent. The global agriculture trade is about $2 trillion. He said that given these numbers, ‘huge opportunities’ are there to increase exports from the country. The street also paid no heed towards reports that the United Nations kept its growth forecast for the Indian economy unchanged at 6.6 percent for 2025, as it noted that private investment and consumption along with strong export growth of services and technology will help sustain the momentum.

On the global front, European markets were trading mostly in green as the provision data from Destatis revealed German industrial output increased 1.5 percent on a monthly basis in November, in contrast to the revised 0.4 percent decrease in October. Asian markets settled mostly down on Thursday as investors reacted to U.S. President-elect Donald Trump's tariff threats, a buoyant dollar and disappointing Chinese inflation data. Back home, on the sectoral front, there was some reaction in metal stocks with CRISIL’s report stating that steel prices in 2025 would be much higher if the proposed safeguard duty on steel imports is imposed. It added that the impact was expected to be more prominent in the first half.

Finally, the BSE Sensex fell 528.28 points or 0.68% to 77,620.21, and the CNX Nifty was down by 162.45 points or 0.69% to 23,526.50.

The BSE Sensex touched high and low of 78,206.21 and 77,542.92 respectively. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 0.96%, while Small cap index was down by 1.17%.

The lone gaining sectoral index on the BSE was FMCG up by 0.73%, while Realty down by 2.90%, Oil & Gas down by 2.19%, Energy down by 1.83%, Power down by 1.68% and PSU down by 1.54% were the top losing indices on BSE.

The top gainers on the Sensex were Nestle up by 1.69%, Hindustan Unilever up by 1.50%, Mahindra & Mahindra up by 1.38%, Kotak Mahindra Bank up by 1.19% and Asian Paints up by 0.69%. On the flip side, Tata Steel down by 2.07%, Zomato down by 1.92%, Larsen & Toubro down by 1.88%, Tata Motors down by 1.86% and Adani Ports &Special down by 1.78% were the top losers.

Meanwhile, rating agency CRISIL in its latest report has said that healthy farm incomes should provide support to rural incomes next fiscal (FY26) and lower inflation and scope for reduced interest rates should improve purchasing power for discretionary spending in India. This fiscal (FY25), real private consumption growth revived to 7.3 per cent from 4 per cent last fiscal. This fiscal, growth in government consumption expenditure rebounded to 4.1 per cent from 2.5 per cent last fiscal, supporting private consumption growth recovery.

The report said over the past few fiscals, government revenue spending on welfare schemes, such as NREGA, rural roads and housing construction, generated employment and bolstered rural demand in the immediate term. It said in FY26, for private consumption to remain strong, government spending must focus on employment generating schemes that put incomes in the hands of those with a higher propensity to consume.

According to the report, a combination of such spending on asset-creating schemes (rural roads, affordable housing and National Rural Employment Guarantee Act works) and furthering government capital expenditure or capex on infrastructure (railways, highways and ports) could moderate the inflation impact of such spending. It noted that if the supporting factors kick in, the pick-up in private consumption growth could be preserved next fiscal.

The CNX Nifty traded in a range of 23,689.50 and 23,503.05. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 2.11%, Nestle up by 1.76%, Hindustan Unilever up by 1.62%, Mahindra & Mahindra up by 1.48% and Britannia Industries up by 1.28%. On the flip side, ONGC down by 2.59%, Shriram Finance down by 2.41%, BPCL down by 2.00%, Coal India down by 1.95% and Tata Steel down by 1.90% were the top losers.

European markets were trading mostly in green; UK’s FTSE 100 increased 56.41 points or 0.68% to 8,307.44 and France’s CAC rose 18.61 points or 0.25% to 7,471.03, while Germany’s DAX lost 13.42 points or 0.07% to 20,316.52.

Asian markets settled mostly down on Thursday tracking a mixed close on Wall Street overnight after the release of mixed US jobs data. The payroll processor ADP released a report showing private sector job growth slowed more than expected in December, while the Labour Department released a report showing weekly jobless claims unexpectedly fell to their lowest level in almost eleven months. The minutes from the Federal Reserve's December meeting revealed that officials expect slower rate cuts in 2025 and remain worried about the inflation impacts from President-elect Donald Trump's policies. Investors’ focus has now shifted to the US nonfarm payrolls report due on Friday that might provide greater clarity on the Federal Reserve's interest rate path for 2025. Chinese and Hong Kong shares declined on disappointing Chinese inflation data that pointed to persistent deflationary pressures in the world's second-largest economy. Data showed that Chinese consumer inflation remained near zero in December, while producer prices continued to slide despite recent stimulus measures. Japanese shares declined and the yen rose against the US dollar on increased speculation over an interest rate hike by the Bank of Japan after strong wage growth for November, while technology shares such as Advantest Corp and Tokyo Electron lost after reports suggested the Biden administration plans one additional round of restrictions on the export of artificial intelligence chips.

Asian Indices	Last Trade	Change in Points	Change in %
Shanghai Composite	3,211.39	-18.78	-0.58
Hang Seng	19,240.89	-38.95	-0.20
Jakarta Composite	7,064.59	-15.76	-0.22
KLSE Composite	1,600.81	-14.02	-0.87
Nikkei 225	39,605.09	-375.97	-0.95
Straits Times	3,862.60	-24.38	-0.63
KOSPI Composite	2,521.90	0.85	0.03
Taiwan Weighted	23,081.13	-326.20	-1.41

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Key indices end lower on Thursday

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