Markets continue to face selling pressure in early afternoon session

Indian equity markets continued to face selling pressure in early afternoon session amid persistent selling by foreign institutional investors (FIIs). Sentiments remained downbeat as commerce ministry in its latest data has showed that India's merchandise exports declined for the third month in a row in January 2025. Traders overlooked private report that Finance Minister Nirmala Sitharaman emphasized that the duty cuts and rationalisation are part of a continuous process aimed at strengthening India’s position in global trade. The move comes as a response to US President Donald Trump’s proposed reciprocal tariffs on trading partners. Meanwhile, credit rating agency ICRA has projected the year-on-year (YoY) expansion of India’s Gross domestic product (GDP) to rise to 6.4% in Q3FY2025 from the seven-quarter low of 5.4% in Q2FY2025, benefitting from enhanced Government spending amid uneven consumption.

On the global front, Asian markets are trading mostly in green despite Japan's industrial production fell by a seasonally adjusted 0.2 percent month-on-month in December, which was slower than the 2.2 percent fall in November. However, the decline in industrial production came in contrast to the initial estimated growth of 0.3 percent.

The BSE Sensex is currently trading at 75736.93, down by 259.93 points or 0.34% after trading in a range of 75531.01 and 76091.69. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 1.10%, while Small cap index was down by 2.21%.

The top losing sectoral indices on the BSE were Industrials down by 2.06%, Telecom down by 1.79%, Consumer Durables down by 1.68%, Capital Goods down by 1.47% and Basic Materials was down by 1.32%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were Tech Mahindra up by 1.31%, Bajaj Finserv up by 0.37%, Axis Bank up by 0.24%, Kotak Mahindra Bank up by 0.20% and NTPC up by 0.12%. On the flip side, Mahindra & Mahindra down by 2.06%, Ultratech Cement down by 1.57%, Tata Motors down by 1.31%, Tata Steel down by 1.27% and Adani Ports down by 1.20% were the top losers.

Meanwhile, credit rating agency ICRA has projected the year-on-year (YoY) expansion of India’s Gross domestic product (GDP) to rise to 6.4% in Q3 FY2025 from the seven-quarter low of 5.4% in Q2 FY2025, benefitting from enhanced Government spending amid uneven consumption. Further, the growth in the gross value added (GVA) is estimated to record a relatively broad-based improvement to 6.6% in Q3 FY2025 from 5.6% in Q2 FY2025, driven by the industrial (to +6.2% from +3.6%), services (to +7.7% from +7.1%), and agricultural (to +4.0% from +3.5%) sectors. On a sombre note, the GDP and GVA growth in Q3 FY2025 is foreseen to continue to trail the NSO’s initial growth estimates for Q1 FY2025 (+6.7% and +6.8%, respectively), which had seen some sectors affected by the Parliamentary elections, the Model Code of Conduct, and also the heat wave in some states.

ICRA estimates that the growth in net indirect taxes (in nominal terms) eased significantly to low single digits in the quarter from 7.9% in Q2 FY2025, owing to a sharp, albeit base effect-led rise in the YoY increase in subsidy disbursement by the Centre (to +31.1% in Q3 FY2025 from +4.3% in Q2 FY2025; -53.6% in Q3 FY2024; -7.6% in Q2 FY2024). As a result, the GDP expansion would continue to trail that in the GVA in Q3 FY2025 for the third quarter in a row, with a similar trend expected in the full year as well.

ICRA projects the industrial GVA growth to record a broad-based pick-up to 6.2% in Q3 FY2025 from 3.6% in Q2 FY2025, led by manufacturing (to +5.0% from +2.2%), construction (to +9.5% from +7.7%), electricity (to +5.0% from +3.3%), and mining and quarrying (to +2.5% from -0.1%), with the latter two sub-sectors partly benefitting from the easing in rainfall. India’s investment activity improved in Q3 FY2025, as reflected in the uptick in the YoY growth in several investment-related indicators vis-a-vis Q2. This includes capital and infrastructure goods’ output, cement production, engineering goods’ exports, and capital spending of the Centre and state governments. The YoY expansion in the GoI’s capex surged to a six-quarter high of 47.7% in Q3 FY2025 from 10.3% in Q2 FY2025.

The CNX Nifty is currently trading at 22857.15, down by 102.35 points or 0.45% after trading in a range of 22801.50 and 22992.50. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 1.30%, Apollo Hospital up by 1.23%, Wipro up by 1.00%, Axis Bank up by 0.21% and Kotak Mahindra Bank up by 0.14%. On the flip side, Trent down by 3.17%, Bharat Electronics down by 2.35%, Mahindra & Mahindra down by 2.21%, Ultratech Cement down by 1.80% and Adani Enterprises down by 1.58% were the top losers.

Asian markets are trading mostly in green; Taiwan Weighted added 160.78 points or 0.68% to 23,666.11, Jakarta Composite gained 57.94 points or 0.85% to 6,888.82, Hang Seng advanced 176.37 points or 0.78% to 22,792.60, Nikkei 225 surged 96.15 points or 0.24% to 39,270.40, KOSPI increased 16.39 points or 0.62% to 2,626.81 and Straits Times was up by 15.05 points or 0.39% to 3,919.90. On the flip side, Shanghai Composite was down by 29.37 points or 0.88% to 3,326.46.