Key gauges snap 3-day run on Friday

Indian equity benchmarks remained under pressure throughout the trading session and ended with losses of nearly half percent on Friday dragged by selling pressure in Infosys, Axis Bank and Kotak Mahindra Bank. Unabated foreign fund outflows and elevated crude prices in international markets also played spoilsport for the bourses. 

Some of the important factors for the markets:

Weaker rupee to hike India's Import Bill: Economic think tank GTRI said the weaker rupee will push the country's import bill due to higher payments for crude oil, coal, vegetable oil, gold, diamonds, electronics, machinery, plastics, and chemicals. 

India's economy growth cut to 6.4%: Industry body FICCI lowered India's growth projection for the current financial year to 6.4 per cent from 7 per cent estimated earlier, citing global uncertainties and domestic slowdown. 

Massive outflow of foreign funds: Foreign Institutional Investors (FIIs) offloaded equities worth Rs 4,341.95 crore on Thursday, according to exchange data.

Rising US bond yields continued to create uncertainty amongst local investors: US Treasury markets are surging at the long-end, with 10-Year yields nearing 5%, a level not seen since October 2023.  

Global front: European markets were trading higher on the back of strong results from Cartier owner Richemont and renewed rate-cut hopes. Asian markets settled mostly higher after a Federal Reserve official said the U.S. central bank could cut rates three or four times this year if inflation data cooperates, with a first cut possible before July.   

Finally, the BSE Sensex fell 423.49 points or 0.55% to 76,619.33, and the CNX Nifty was down by 108.60 points or 0.47% to 23,203.20.     

The BSE Sensex touched high and low of 77,069.19 and 76,263.29 respectively. There were 15 stocks advancing against 15 stocks declining on the index.           

The broader indices ended in green; the BSE Mid cap index rose 0.04%, while Small cap index was up by 0.01%.

The top gaining sectoral indices on the BSE were Energy up by 1.63%, Capital Goods up by 1.59%, Metal up by 1.54%, Realty up by 1.35% and Oil & Gas up by 1.25%, while IT down by 2.48%, TECK down by 2.15%, Bankex down by 1.83% and Auto down by 0.28% were the top losing indices on BSE.

The top gainers on the Sensex were Zomato up by 2.79%, Reliance Industries up by 2.57%, Nestle up by 2.26%, Tata Steel up by 1.96% and Asian Paints up by 1.95%. On the flip side, Infosys down by 5.77%, Axis Bank down by 4.71%, Kotak Mahindra Bank down by 2.58%, Mahindra & Mahindra down by 2.11% and TCS down by 1.96% were the top losers.

Meanwhile, Crisil in its latest report has said that India will need to invest a staggering $10 trillion in green technologies and energy efficiency initiatives by 2070. The report noted that this investment is critical for the country to meet its decarbonisation goals and work towards achieving net-zero emissions by 2070.

The report also noted that the country has already set ambitious targets for 2030. India aims to reduce its carbon intensity by 45 per cent and increase the share of non-fossil-fuel energy in its total installed capacity to 50 per cent. To meet these targets, India anticipates a significant rise in green investments, which are expected to increase five-fold by 2030. This surge in investments presents a transformative opportunity, valued at nearly Rs 31 lakh crore.

It highlighted that India’s commitment to decarbonisation has never been more urgent, as it emerged as the third-largest emitter of greenhouse gases globally in 2023. The country’s emissions surged by 6.1 per cent last year, contributing to 7.8 per cent of global emissions. With energy demand expected to rise in the coming decades, India faces the dual challenge of balancing rapid economic growth with the need for sustainable energy solutions.

The CNX Nifty traded in a range of 23,292.10 and 23,100.35. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were BPCL up by 2.68%, Reliance Industries up by 2.65%, Coal India up by 2.52%, Hindalco up by 2.22% and Nestle up by 2.20%. On the flip side, Infosys down by 5.75%, Axis Bank down by 4.43%, Shriram Finance down by 3.71%, Kotak Mahindra Bank down by 2.58% and Wipro down by 2.20% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 87.98 points or 1.05% to 8,479.88, France’s CAC rose 67.55 points or 0.88% to 7,702.29 and Germany’s DAX gained 193.58 points or 0.94% to 20,848.97.

Asian markets settled mostly higher on Friday after China’s GDP grew 5.4% over the year in the fourth quarter of 2024 after reporting a 4.6% expansion in the third quarter, while the Chinese economy expanded 5% for the whole year of 2024 in line with the official growth target. Separate data revealed that China’s industrial production climbed 6.2% in December from a year earlier versus expectations of 5.4%, and Retail sales in December jumped 3.7% from a year earlier, exceeding forecast of 3.5%. The markets were cheered further by comments from Federal Reserve Governor Christopher Waller that officials could lower rates again in the first half of 2025 if inflation data continue to be favourable. But some gains were limited by caution ahead of a US holiday weekend and President-elect Donald Trump's inauguration and tariff policies. Japanese shares declined as the yen surged amid expectations of a Bank of Japan interest rate hike next week. Earlier this week, BoJ Governor Kazuo Ueda had said that a hike was possible if economic and price conditions continue to improve. Seoul shares fell, a day after the Bank of Korea surprised markets by keeping its policy interest rate at 3%, contrary to widespread expectations of a 25-basis point cut.