Sensex, Nifty trade deep in red in early deals; Manufacturing PMI eyed

Indian equity benchmarks made gap-down opening on Monday tracking sell-off in Asian counterparts after U.S. President Donald Trump signed three separate executive orders, imposing 25 percent on goods from Mexico and Canada, and 10 percent on all imports from China, instigating a trade war that's set to reshape global supply chains. Both leaders in Canada and Mexico have announced they will put their own tariffs against the U.S., targeting certain industries. Sensex and Nifty are trading deep in red with cut of around a percent each in early deals on selling in almost all the sector indices except Consumer Durables. Investors are looking ahead to the manufacturing PMI data to be out later in the day. Traders overlooked report that Finance Minister Nirmala Sitharaman rejected criticism over the slide of the Indian rupee, saying it has depreciated only against a strengthening US dollar but remained stable against all other currencies because of the strong macroeconomic fundamentals.

On the global front, Asian markets are trading in red amid the manufacturing sector in Japan continued to contract in January, and at a faster pace, the latest survey from Jibun Bank revealed with a PMI score of 48.7. That's down from 49.6 in December, and it moves further beneath the boom-or-bust line of 50 that separates expansion from contraction. Back home, sugar sector stocks are in focus as a private report noted that sugar production in India is expected to face a significant decline in the 2025 season, with forecasts predicting a drop to below 27 million metric tons (MMT), down from 31.8 MMT in the previous year. In stock specific development, Maruti Suzuki traded higher after the automaker's total sales in January crossed 2 lakh units. The total sales for India's largest passenger car manufacturer, rose 6.5% from last year's 1.99 lakh units.

The BSE Sensex is currently trading at 76793.36, down by 712.60 points or 0.92% after trading in a range of 76774.05 and 77128.57. There were 8 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 1.18%, while Small cap index was down by 1.50%.

The sole gaining sectoral index on the BSE was Consumer Durables was up by 0.57%, while Capital Goods down by 3.97%, Metal down by 3.96%, PSU down by 3.61%, Power down by 3.56% and Industrials down by 3.35% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 1.58%, Titan Company up by 1.53%, Nestle up by 1.45%, Sun Pharma up by 1.05% and Bajaj Finserv up by 0.90%. On the flip side, Larsen & Toubro down by 4.27%, NTPC down by 4.16%, Tata Steel down by 3.61%, Power Grid down by 3.52% and Tata Motors down by 2.53% were the top losers.

Meanwhile, Finance Minister Nirmala Sitharaman has rejected criticism over the slide of the Indian rupee, saying it has depreciated only against a strengthening US dollar but remained stable against all other currencies because of the strong macroeconomic fundamentals. She said a 3 per cent depreciation in the rupee against the US dollar in past few months is a matter of concern as it makes imports costlier, but she rejected criticism that the local currency has seen all-round weakness.

The Indian rupee has been under pressure in the last few months but it continues to be the least volatile currency against the US dollar among its Asian and global peers. The reasons for the rupee hitting record lows almost on a daily basis against the US dollar range from widening trade deficit to a surge in the dollar index after the US Federal Reserve hinted at fewer rate cuts in 2025. The Reserve Bank has reportedly spent $77 billion from its foreign exchange reserves to defend the rupee from falling sharply in the spot market, taking India’s foreign exchange reserves down to $629.557 billion as on January 30, 2024, from $701.176 billion on October 4, 2024.

Sitharaman said ‘Rupee’s volatility is against the dollar. Rupee has behaved in a far more stable fashion than any other currency’. Rupee volatility is noticeable as the dollar is strengthening. She added ‘RBI also has been looking at ways in which it will interfere in the market only to stabilise the need for avoiding huge volatility based reasons. So we are all closely watching the situation’. 

She termed critics pointing to rupee volatility and depreciation as ‘a very quick argument’. She added ‘But in today’s dollar strengthening environment and in the new US administration, the rupee will have to be understood in its relationship with the dollar (and) the fluctuations which come as a result of that. Criticisms can come, but those criticisms will also have to go with a response with a bit more study’.

The CNX Nifty is currently trading at 23225.30, down by 256.85 points or 1.09% after trading in a range of 23222.50 and 23345.15. There were 13 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Nestle up by 1.65%, Titan Company up by 1.60%, Maruti Suzuki up by 1.54%, Eicher Motors up by 1.29% and Wipro up by 0.87%. On the flip side, Bharat Electronics down by 6.32%, BPCL down by 5.05%, Coal India down by 4.53%, ONGC down by 4.47% and Hindalco down by 4.43% were the top losers. 

Asian markets are trading lower; Nikkei 225 slipped 1117.36 points or 2.82% to 38,455.13, Taiwan Weighted lost 880.6 points or 3.74% to 22,644.81, Jakarta Composite weakened 158.1 points or 2.22% to 6,951.10, Hang Seng declined 149.16 points or 0.74% to 20,075.95, KOSPI fell 77.10 points or 3.06% to 2,440.27 and Straits Times was down by 11.43 points or 0.3% to 3,844.39.