Fag-end buying lifts markets higher

Indian markets managed to garner gains on Wednesday, with both Sensex and Nifty ending over half a percent higher, driven by strength in technology stocks. After an optimistic start, markets remained higher for the most part of the session, tracking positive cues from the global markets. A correction was witnessed during mid of the session but indices gained traction in the last leg of the trade, amid positive results from HDFC Bank.

Some of the important factors for the markets:

Boost to domestic manufacturing aided sentiments: The government has disbursed Rs 1,596 crore under Production-Linked Incentive (PLI) schemes for six sectors, including electronics and pharma, during the April-September this fiscal.

EPFO adds 14.63 lakh net members in November: Employees' Provident Fund Organisation in its ‘Provisional payroll data’ report showed that 14.63 lakh net members have been added in the month of November 2024, an increase of 9.07% as compared to the previous month of October 2024.

HDFC Bank turned out to be a key driver for the recovery: The bank, on consolidated basis, reported 2.31% rise in its net profit at Rs 17656.61 crore for the quarter ended December 31, 2024 as compared to Rs 17257.87 crore for the same quarter in the previous year.

Some cautiousness prevailed amid foreign fund outflows: Foreign institutional investors (FIIs) and foreign portfolio investors (FPIs) net sold stocks worth Rs 5,920.28 crore in the secondary markets on January 21, taking the month-to-date selling above Rs 50,000-crore mark.

Global cues remained positive: European markets were trading higher, even as the UK budget deficit more than doubled in December from the last year as increases in spending were much larger than increases in receipts. Asian markets settled mostly higher, after South Korea's consumer sentiment increased for the first time in three months in January. 

Finally, the BSE Sensex surged 566.63 points or 0.75 % to 76,404.99, and the CNX Nifty was up by 130.70 points or 0.57% to 23,155.35.    

The BSE Sensex touched high and low of 76,463.13 and 75,816.50 respectively. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell by 1.20%, while Small cap index was down by 1.56%.

The top gaining sectoral indices on the BSE were IT up by 1.88%, TECK up by 1.65%, Bankex up by 0.26% and Healthcare up by 0.06%, while Realty down by 4.53%, Industrials down by 1.88%, Capital Goods down by 1.82%, Power down by 1.57% and PSU down by 1.45% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 3.16%, TCS up by 2.97%, Tech Mahindra up by 2.64%, Sun Pharma up by 2.05% and Bajaj Finserv up by 1.63%. On the flip side, Tata Motors down by 2.24%, Power Grid down by 1.47%, Axis Bank down by 1.02%, SBI down by 0.76% and NTPC down by 0.56% were the top losers.

Meanwhile, with an aim to enhance the global competitiveness of India’s diamond sector, Department of Commerce, Government of India has introduced the Diamond Imprest Authorization (DIA) Scheme. Among the key features, this scheme allows the duty-free import of Natural Cut and Polished Diamonds, of less than 1/4 Carat (25 Cents). This scheme mandates export obligation with a value addition of 10 per cent. All Diamond exporters holding Two Star Export House status and above and having $15 Million exports per year, are eligible for availing the benefit under this scheme.

The Ministry of Commerce and Industry added that the scheme is made in response to Beneficiation policies undertaken in a number of natural diamond mining countries like Botswana, Namibia Angola etc where Diamond manufactures are obliged to open cut and polishing facilities for a minimum percentage of value addition. It said this scheme is aimed towards retaining India’s position as a global leader in the entire value chain of Diamond industry.

The scheme is designed to provide a level playing field for Indian diamond exporters, particularly MSME exporters, enabling them to compete effectively with larger peers. It aims to prevent the potential flight of investments by Indian diamantaires to diamond-mining destinations. Additionally, the scheme is expected to generate more employment opportunities, particularly for diamond assorters and in the processing of semi-finished diamonds in factories, the release added. By facilitating Indian exporters, it seeks to protect the domestic diamond processing industry and sustain the associated employment.

The CNX Nifty traded in a range of 22,981.30 and 23,169.55. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Wipro up by 3.60%, Infosys up by 3.10%, TCS up by 2.99%, Tech Mahindra up by 2.65% and Sun Pharma up by 2.06%. On the flip side, Bharat Electronics down by 3.10%, Tata Motors down by 2.37%, Trent down by 1.93%, Power Grid down by 1.59% and Axis Bank down by 1.12% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 36.41 points or 0.43% to 8,584.70, France’s CAC rose 66.96 points or 0.86% to 7,837.91 and Germany’s DAX gained 256.7 points or 1.22% to 21,298.70.

Asian markets settled mostly higher on Wednesday, tracking Wall Street’s gains overnight and as US bond yields dipped ahead of FOMC meeting and US PCE data and digested US President Donald Trump’s latest comments. Japanese markets gained as Donald Trump announced a major $500 billion AI infrastructure project in US in collaboration with SoftBank, Oracle, and OpenAI, while yen slipped after reports suggested the Bank of Japan remains on track to raise interest rates on Friday. However, Chinese and Hong Kong shares fell on signs of rising tensions between the world's largest economies after US President Donald Trump threatened tariffs on the EU and China to address trade imbalances and combat fentanyl trafficking.