Key gauges log fifth straight session of losses

Indian equity benchmarks ended lower for fifth consecutive session on Tuesday weighed down by losses in Realty, Industrials and Healthcare stocks. Besides, concerns over ongoing foreign fund outflows, signs of slowing corporate earnings growth and geopolitical tensions involving Israel and Hamas weighed on markets.   

Some of the important factors in today’s trade: 

Fresh US tariffs reignited trade war fears: Traders were cautious as fears over US tariffs under the Trump administration intensified, with fresh 25 per cent tariffs announced on US steel and aluminium imports, without exceptions or exemptions.  The recent moves are set to stoke inflationary pressure in the US and delay a likely shallow rate cut cycle there.

Investors eyed domestic economic data: Investors are looking ahead to the upcoming domestic economic data - consumer price index (CPI) and index of industrial production (IIP) - to be released this week.

Sustained FII outflows: Foreign institutional investors (FIIs) offloaded equities worth Rs 2,463.72 crore in the capital markets on a net basis on Monday, according to exchange data. 

Rupee rose most in over two years: Indian rupee rallied 63 paise, recording its steepest single-day recovery in nearly two years, to trade at 86.83 (provisional) against the US dollar, backed by dollar selling by banks. 

Global front: European markets were trading mostly in green as the statistical office INSEE reported France's unemployment rate dropped marginally in the fourth quarter. Asian markets settled mostly down after U.S. President Donald Trump imposed 25 percent tariffs on all U.S. imports of steel and aluminum, stoking fears of a trade war and potential inflation. 

Finally, the BSE Sensex fell 1018.20 points or 1.32% to 76,293.60, and the CNX Nifty was down by 309.80 points or 1.32% to 23,071.80.      

The BSE Sensex touched high and low of 77,387.28 and 76,030.59 respectively. There was 1 stock advancing against 29 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 2.88%, while Small cap index was down by 3.40%.

The top losing sectoral indices on the BSE were Realty down by 3.14%, Industrials down by 2.87%, Healthcare down by 2.78%, Consumer Discretionary down by 2.73% and Capital Goods down by 2.59%, while there were no gaining sectoral indices on the BSE. 

The lone gainer on the Sensex was Bharti Airtel up by 0.19%. On the flip side, Zomato down by 5.24%, Tata Steel down by 2.91%, Bajaj Finserv down by 2.70%, Power Grid Corporation down by 2.68% and Larsen & Toubro down by 2.65% were the top losers.

Meanwhile, Minister of State for Finance Pankaj Chaudhary has said that the Centre has released about Rs 1.11 lakh crore loan to states during April-January under the scheme for special assistance to states for capital expenditure. In the 2024-25 Budget, Finance Minister Nirmala Sitharaman hiked the allocations for interest-free loans to states for capital expenditure, enabling states to spend more on infrastructure and specified reforms. The allocation was hiked to Rs 1.5 lakh crore, up from disbursal of Rs 1.10 lakh crore made in 2023-24. 

Chaudhary said under the scheme for special assistance to states for capital expenditure, the Centre has approved loans worth Rs 1.22 lakh crore till January 31. Of this, about Rs 1.11 lakh crore has been released. He said out of the total allocation of Rs 1.50 lakh crore, an amount of Rs 55,000 crore under Part-I of the scheme is untied. This amount has been allocated to the states in proportion to their share of central taxes and duties as per the award of the 15th Finance Commission.

He said the remaining amount of Rs 95,000 crore is inter-alia earmarked for reforms in certain citizen centric areas and taking up sector specific projects like development of iconic tourist centres on global scale; incentive for scrapping of old vehicles; stimulating industrial growth. According to the data, the top beneficiary states so far in FY24 are Bihar (Rs 11,522 crore), followed by Uttar Pradesh (Rs 10,795 crore), Madhya Pradesh (Rs 10,166 crore), and West Bengal (Rs 9,729 crore).

The CNX Nifty traded in a range of 23,390.05 and 22,986.65. There were 6 stocks advancing against 44 stocks declining on the index.  

The top gainers on Nifty were Adani Enterprises up by 1.32%, Grasim Industries up by 0.76%, Trent up by 0.52% and Bharti Airtel up by 0.17%. On the flip side, Eicher Motors down by 6.70%, Apollo Hospital down by 6.61%, Shriram Finance down by 4.51%, Coal India down by 3.37% and Bharat Electronics down by 3.29% were the top losers.

European markets were trading mostly in green; France’s CAC rose 2.26 points or 0.03% to 8,008.48, Germany’s DAX gained 22.54 points or 0.1% to 21,934.28 and UK’s FTSE 100 decreased 2.61 points or 0.03% to 8,765.19. 

Asian markets settled mostly down in thin trade on Tuesday as both Japanese and Malaysian markets were closed for holiday, while investors were cautiously awaiting a testimony from Federal Reserve Chair Jerome Powell and a reading on US inflation for cues on the US interest-rate outlook. Chinese and Hong Kong shares declined due to US trade policy shifts and deflation concerns as retaliatory Chinese duties on US energy and some goods came into effect on Monday.