Indian markets snap 2-day rally amid volatility

Indian equity markets witnessed volatility in Friday’s trading session and ended in a negative terrain amid foreign fund outflows. Traders paid no attention towards reports that President Donald Trump lobbed his first volley at the Federal Reserve, saying that he will apply pressure to bring down interest rates.

Some of the important factors for the markets:

Foreign fund outflows dented domestic sentiments: The Foreign institutional investors (FIIs) remained net sellers on the 15th consecutive day as they sold equities worth Rs 5,462.52 crore on January 23. 

Indian private sector companies witnessed slowdown in growth: Sentiments got hit, after the latest HSBC ‘flash’ PMI data report, compiled by S&P Global, has showed that Indian private sector companies started 2025 with a slowdown in growth, amid slower growth in new business intakes and aggregate output. 

U.S. President pressured OPEC: Traders got some relief as crude oil prices fell after U.S. President Donald Trump pressured OPEC and its de facto leader Saudi Arabia to lower prices in a broad push to drive up crude production.

Rupee weakest performing currency in Southeast Asia: Sentiments were cautious as Moody's Ratings said the Indian rupee has depreciated by around 5 per cent in the last two years and has fallen by 20 per cent in the last five years making it one of the weakest performing currencies in South and South East Asia. 

Global cues remained positive: Most of the European markets were trading in green, after U.S. President Donald Trump called for lower interest rates and cheaper oil prices. Asian markets ended mixed, after the Bank of Japan raised its short-term interest rate to the highest in seventeen years on Friday as expected, aiming for a sustainable and stable achievement of the price stability target of 2.0 percent amidst rising wages. 

Finally, the BSE Sensex fell 329.92 points or 0.43% to 76,190.46, and the CNX Nifty was down by 113.15 points or 0.49% to 23,092.20.    

The BSE Sensex touched high and low of 76,985.95 and 76,091.75 respectively. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index declined by 1.60%, while Small cap index was down by 2.23%.

The only gaining sectoral indices on the BSE were FMCG up by 0.27% and TECK up by 0.24%, while Realty down by 2.50%, Oil & Gas down by 2.30%, Industrials down by 2.22%, Healthcare down by 2.19% and Energy down by 1.95% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 1.98%, Tech Mahindra up by 0.75%, Nestle up by 0.70%, ICICI Bank up by 0.58% and Infosys up by 0.56%. On the flip side, Mahindra & Mahindra down by 2.92%, Zomato down by 2.75%, Tata Motors down by 2.48%, Indusind Bank down by 2.11% and Reliance Industries down by 1.42% were the top losers.

Meanwhile, Union Minister Ashwini Vaishnaw has said that India is poised for a global leadership position in the area of artificial innovation just like it has proven its mettle in IT services. He said all necessary regulations would be in place for AI while maintaining a balance with innovation. Talking about a united India face at Davos this time, he said ‘Prime Minister Narendra Modi had told us clearly that the Indian pavilion this time in Davos should integrate all states. That has sent a very good signal this time for a unified image of the country. Leaders from 5-6 different parties came together on one stage.’

He said people across the world now understand how India could stay on a sustained growth path when many other countries went deep under debt. On misinformation and mistrust emerging as biggest threats globally as identified by the World Economic Forum and challenges posed by AI, he said ‘we will definitely need to take necessary safeguards but the opportunities presented by AI are also huge and they must be tapped responsibly.’

He stated ‘The way India has proved its mettle in IT services, a similar opportunity is there in terms of AI. For that we need to prepare our youth. Like we started 5G labs in 100 universities for telecom and the way we equipped 250 universities with latest semiconductor design tools, the same we are starting AI-ready courses in 200 universities to prepare our youth to ensure leadership position for India in the AI space.’

The CNX Nifty traded in a range of 23,050.00 and 23,347.30. There were 18 stocks advancing against 31 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Hindustan Unilever up by 2.00%, Britannia up by 1.77%, Eicher Motors up by 1.76%, Grasim Industries up by 1.20% and Tata Consumer Products up by 0.86%. On the flip side, Dr. Reddy's Lab down by 5.04%, Trent down by 4.24%, Mahindra & Mahindra down by 2.95%, Adani Enterprises down by 2.93% and BPCL down by 2.75% were the top losers.

European markets were trading mostly in green; France’s CAC rose 79.68 points or 1.01% to 7,972.29 and Germany’s DAX gained 83.61 points or 0.39% to 21,495.14, while UK’s FTSE 100 decreased 27.34 points or 0.32% to 8,537.86.

Asian markets settled mixed on Friday. At the World Economic Forum in Davos, Switzerland, US President Donald Trump has warned global business leaders they will face tariffs for products made outside of the US, while also said he would press the US Federal Reserve to lower interest rates immediately and ask OPEC and Saudi Arabia to bring down the cost of oil. Chinese and Hong Kong shares gained after US President Donald Trump said that his recent conversation with Chinese President Xi Jinping was friendly and that he would rather not impose tariffs on China, suggesting a potentially softer stance on tariffs against the country. Meanwhile, the Chinese government is urging local mutual funds and insurers to increase their stock investments, aiming to improve its struggling equity market amid escalating trade tensions with the United States. Japanese shares ended almost unchanged as the Bank of Japan hiked the short term rate target by 25 basis points as expected and new data showed core inflation rose last month at the fastest pace in 16 months.