Key gauges continue fall for 2nd straight day

Indian equity benchmarks experienced a downward trend for the second straight session and ended with losses of over a percent on Monday, pressured by concerns over weak corporate earnings, uncertainty surrounding U.S. trade and tariff policies, and persistent foreign fund outflows. The weakness in the markets was primarily seen in Telecom and IT stocks. 

Some of the important factors for the markets:

Ongoing foreign investor withdrawals: Foreign Institutional Investors (FIIs) offloaded Rs 2,758.49 crore in the capital markets on net basis on Friday, according to exchange data.  In January alone, FPIs have pulled out Rs 69,000 crore from the Indian market. 

India's forex reserves touch 11-month low: The RBI said India's forex reserves dropped by $1.88 billion to $623.983 billion in the week ended January 17. Earlier, the overall kitty declined by $8.714 billion to $625.871 billion in the week ended January 10.

Profit booking ahead of Union Budget: Another factor contributing to the market’s fall is profit booking by traders ahead of the Union Budget, which is scheduled to be presented on February 1, 2025. The upcoming Union Budget is expected to play a crucial role in shaping market sentiment.

US trade policy concerns: Markets drifted further lower as worries persist over U.S. President Donald Trump's trade and immigration policies. The Trump administration said it was pausing punitive tariffs against Colombia after its leader agreed to grant entry to U.S. military flights carrying deported migrants.  

Global markets impact: European markets were trading lower as artificial intelligence-related stocks succumbed to selling pressure on doubts over America's technological dominance. Asian markets settled mostly down as investors reacted to weak Chinese data and awaited interest-rate decisions from the U.S. Federal Reserve and the European Central Banks this week for directional cues.

Finally, the BSE Sensex fell 824.29 points or 1.08% to 75,366.17, and the CNX Nifty was down by 263.05 points or 1.14% to 22,829.15.    

The BSE Sensex touched high and low of 75,925.72 and 75,267.59 respectively. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 2.68%, while Small cap index was down by 3.51%.

The top losing sectoral indices on the BSE were Telecom down by 3.83%, IT down by 3.31%, TECK down by 3.04%, Metal down by 2.86% and Healthcare down by 2.71%, while there were no gaining sectoral indices on the BSE. 

The top gainers on the Sensex were ICICI Bank up by 1.53%, Hindustan Unilever up by 0.99%, Mahindra & Mahindra up by 0.98%, SBI up by 0.65% and Maruti Suzuki up by 0.15%. On the flip side, HCL Technologies down by 4.60%, Zomato down by 4.47%, Tech Mahindra down by 4.08%, Power Grid Corporation down by 2.94% and Infosys down by 2.83% were the top losers.

Meanwhile, with a specific aim of strengthening collaboration in the health technology and innovation sectors, India and the UK have agreed to enhance bilateral cooperation in the field of healthcare and life sciences as strategic partners with strong links in the area. The Health and Life Sciences Partnership signed by UK Health Secretary Wes Streeting in London will cover a broad range of areas, including digitisation and innovation across the country's state-funded National Health Service (NHS). This will strengthen the UK's partnership of cooperation with India on healthcare innovation and health security. The memorandum of understanding (MoU), signed by Union Minister of Health and Family Welfare Jagat Prakash Nadda at the Delhi end, will also cover joint research, information sharing and cooperation through multilateral fora in areas such as antimicrobial resistance (AMR).

Indian High Commissioner to the UK Vikram Doraiswami said the Health and Life Sciences agreement recognises that both countries have strengths in the sector and that this is a critical part of the offerings that any modern nation offers to its citizens quality healthcare. He said the focus is on things like antimicrobial resistance, which really is a critical issue for both countries. India is among the world's big producers of generic antibiotics and access to affordable antibiotics is critical. He also highlighted areas such as health services, given India's expertise in the field of training doctors and other healthcare professionals, and the wide scope to partner with the UK in its NHS reform agenda, including in the digital space around healthcare. 

According to the MoU, the exchange of information and cooperation between both countries' designated healthcare bodies will focus on matters of mutual interest. Besides, AMR and medical training, the early focus of the agreement will cover digital health interventions, including telemedicine, public health and disease surveillance; cyber security, including information on the challenges and capabilities to boost resilience; mutually enhancing medical supply resilience to effectively prevent, mitigate and respond to future supply disruptions collaboratively; and health security, including cooperation and research on infectious disease. Other areas within the remit of the MoU include medical value travel, primary healthcare as a keystone and regulatory issues, including regulation and quality assurance of medicines and medical devices and sharing of quality standards.

The CNX Nifty traded in a range of 23,007.45 and 22,786.90. There were 8 stocks advancing against 42 stocks declining on the index. 

The top gainers on Nifty were Britannia Industries up by 1.50%, ICICI Bank up by 1.33%, Mahindra & Mahindra up by 1.02%, Hindustan Unilever up by 0.97% and SBI up by 0.45%. On the flip side, HCL Technologies down by 4.59%, Tech Mahindra down by 4.18%, Wipro down by 3.78%, Hindalco down by 3.53% and Shriram Finance down by 3.22% were the top losers. 

European markets were trading lower; UK’s FTSE 100 decreased 17.41 points or 0.21% to 8,484.94, France’s CAC fell 66.96 points or 0.85% to 7,860.66 and Germany’s DAX lost 276.87 points or 1.31% to 21,118.06.

Asian markets settled mostly down on Monday as investors are awaited interest-rate decisions from the US Federal Reserve and the European Central Banks this week for directional cues. Meanwhile, the South Korean, Indonesian and Taiwan markets were closed for a holiday. Moreover, Wall Street’s Friday fall, weak Chinese data and looming tariff threats from US President Donald Trump have also dampened market sentiments. US President Donald Trump had threatened tariffs and sanctions on Colombia to punish it for earlier refusing to accept military flights carrying deportees as part of his sweeping immigration crackdown. But, House said Colombia had agreed to accept the migrants after all and Washington would not impose its threatened penalties. Chinese shares declined after data showed Chinese manufacturing activity unexpectedly shrank in January and non-manufacturing activity growth slowed sharply, that fuelled concerns about Q1 2025 growth and the effectiveness of stimulus measures. Profits at China's industrial firms fell for a third straight year in 2024 highlighting the urgency for policymakers to step up support for an economy facing tariff threats from the new Trump administration.