Sensex, Nifty give up opening gain in early deals

Indian equity benchmarks made an optimistic start on Tuesday tracking broadly positive cues from Asian counterparts, as markets reacted positively to US President Donald Trump's decision not to impose China-specific tariffs on his first day in office. However, Sensex and Nifty soon slipped below neutral lines in early deals amid selling in Consumer Durables and Realty counters. Foreign fund outflows also dented domestic sentiments. On January 20, FIIs/FPIs net sold India stocks worth Rs 4,336.54 crore. Thus far in January, FPIs have sold stocks worth Rs 48,023 crore. 

On the sectoral front, sugar sector stocks are in focus as a private report indicated that sugar prices hit their lowest in more than three years on January 20 amid reports that India will allow 1 million metric tons of sugar exports in the current season that runs through to end-September. In stock specific developments, APL Apollo Tubes gained as Q3 PAT climbs 31.5% to Rs 217 crore. However, Dixon Technologies India plunged despite the company reporting a stellar set of Q3 earnings.

The BSE Sensex is currently trading at 76891.05, down by 182.39 points or 0.24% after trading in a range of 76866.73 and 77297.72. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.07%, while Small cap index was up by 0.25%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.94%, Metal up by 0.79%, Basic Materials up by 0.75%, Healthcare up by 0.66% and Energy up by 0.50%, while Consumer Durables down by 1.75%, Realty down by 1.29%, Telecom down by 0.88%, Consumer discretionary down by 0.71% and Power down by 0.48% were the top losing indices on BSE.

The top gainers on the Sensex were Ultratech Cement up by 1.38%, Tata Motors up by 0.87%, ITC up by 0.51%, HCL Technologies up by 0.41% and Larsen & Toubro up by 0.39%. On the flip side, Zomato down by 8.63%, Kotak Mahindra Bank down by 0.99%, Adani Ports & SEZ down by 0.87%, NTPC down by 0.77% and SBI down by 0.56% were the top losers.

Meanwhile, Moody's Ratings has projected the Indian economy to grow by 7% in the current fiscal (FY25) and said robust economic expansion will drive growth in insurance premiums. It expects Indian insurers to benefit from sustained premium growth, helped by India’s robust economic expansion and rising demand for health insurance. Higher premium income, driven also by an anticipated rise in prices as the government reforms the country’s dominant state-owned insurance sector, will improve the industry's currently weak profitability.

It said India’s private sector insurers continue to reinforce their solvency, but it expects some pressure on their capital adequacy because of increased underwriting exposure and regulatory changes. It noted ‘We expect India's economy to grow by 7% in FY 2024 (year to March 2025), down slightly from 8.2% the previous year. India’s GDP per capita at purchasing power parity is also growing, up 11% year on year to $10,233 in FY2023’. 

Higher average incomes coupled with consumers' increased risk awareness will support demand for insurance, particularly health cover. Total premiums grew by 16% in the first eight months of 2024, outpacing the 8% expansion achieved in FY 2023. We expect continued premium increases to bolster Indian insurers' revenue. 

Moody's expects India's GDP to grow by 6.6% in FY 2025 (2025-26). India's insurance density (insurance premiums per capita) rose to $95 in FY 2023 from $92 in FY 2022, up from a historical average of below $80. However, the country's overall insurance penetration rate (insurance premiums as a share of GDP) was just 3.7% in FY 2023, still far below-developed markets such as the UK (9.7%) and the US (11.9%). This indicates that the Indian insurance industry still has ample growth potential.

The CNX Nifty is currently trading at 23340.10, down by 4.65 points or 0.02% after trading in a range of 23335.45 and 23426.30. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Apollo Hospital up by 3.15%, BPCL up by 3.07%, Hindalco up by 1.48%, Ultratech Cement up by 1.10% and Eicher Motors up by 1.09%. On the flip side, Trent down by 1.41%, Adani Enterprises down by 1.10%, Kotak Mahindra Bank down by 1.02%, Adani Ports & SEZ down by 0.84% and Reliance Industries down by 0.67% were the top losers.

Asian markets are trading mostly in green; Hang Seng advanced 230.98 points or 1.16% to 20,156.79, Taiwan Weighted added 55.74 points or 0.24% to 23,322.56, Nikkei 225 surged 31.25 points or 0.08% to 38,933.75, Jakarta Composite gained 17.59 points or 0.25% to 7,188.33, Shanghai Composite strengthened 5.47 points or 0.17% to 3,249.85 and KOSPI increased 4.14 points or 0.16% to 2,524.19, while Straits Times was down by 18.14 points or 0.48% to 3,789.83.