Key gauges end marginally lower on Thursday

Indian equity benchmarks erased most of their losses but ended marginally lower on Thursday as fresh tariff threats, weak Asian markets and foreign fund outflows hurt investors' sentiment. After showing weak opening, the markets shifted into an upside recovery in the early part and later shifted into a range bound movement for remaining part of the session. However, broader indices extended their gains for another session, advancing over one percent each. 

Some of the important factors in today’s trade:  

Global economy continues to grow at steady but moderate pace: The RBI in its latest monthly bulletin-February 2025 said that the global economy continues to grow at a steady but moderate pace, with divergent outlook across countries amid rapidly evolving political and technological landscapes.

Trump's tariff talks continued to impact markets: Trump's declaration that the US will impose 25% tariffs on automobiles, semiconductors and pharmaceuticals impacted India's pharma stocks since India's leading pharma companies are major exporters to the US. 

FIIs resumed selling spree: Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,881.30 crore on Wednesday after a day's breather, according to exchange data. 

Indian rupee gained strength: Indian rupee appreciated 34 paise to trade at 86.64 (provisional) against the US dollar, supported by the weakening of the American currency in the overseas market.

Crude oil prices edged up: Crude oil prices edged up, supported by supply disruptions in Russia and the U.S., while the market awaits further clarity on sanctions related to the Ukraine conflict. 

Global front: Asian markets settled down as the minutes of the Federal Reserve's January policy meeting revealed concerns over inflation risks and U.S. President Donald Trump's harsh criticism of Ukrainian President Zelenskyy heightened tensions in the ongoing conflict. European markets were trading mostly in green despite concerns and uncertainty over U.S. rate cuts.

Finally, the BSE Sensex fell 203.22 points or 0.27% to 75,735.96, and the CNX Nifty was down by 19.75 points or 0.09% to 22,913.15.        

The BSE Sensex touched high and low of 75,794.15 and 75,463.01 respectively. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 1.18%, while Small cap index was up by 1.32%.

The top gaining sectoral indices on the BSE were Power up by 2.19%, Utilities up by 2.17%, Metal up by 2.02%, PSU up by 1.81% and Oil & Gas up by 1.66%, while Bankex down by 0.50% and FMCG down by 0.04% were the few losing indices on BSE.

The top gainers on the Sensex were NTPC up by 3.32%, Mahindra & Mahindra up by 3.01%, Adani Ports & SEZ up by 2.85%, Tata Steel up by 1.58% and Tata Motors up by 1.33%. On the flip side, HDFC Bank down by 2.35%, Maruti Suzuki down by 1.81%, Tech Mahindra down by 1.69%, HCL Technologies down by 1.33% and ITC down by 1.06% were the top losers.

Meanwhile, S&P Global Ratings has said the impact of the US reciprocal tariff will be limited on India as the economy is domestically oriented with less reliance on exports. YeeFarn Phua, Director, Sovereigns and International Public Finance Ratings, Asia-Pacific S&P Global also said India will clock a 6.7-6.8 per cent GDP growth over the next two years. He added ‘these growth rates, even though slower than before, continue to place India above sovereign peers at similar income levels, and we do believe that this will continue to support fiscal revenue growth despite the income tax cuts’.

He said the fiscal 2025-26 budget will boost growth for the next few years, largely by domestic demand through tax cuts for households and GDP growth is now normalising to a more ‘sustainable level’. He said ‘The government remains very much focused on investment-led growth and also on agriculture sector reforms. However, we do think that economic expansion in India is startling to normalise towards a more sustainable level after real growth had averaged 8.3 per cent over the last three years post-pandemic.’

S&P Global Ratings has a 'BBB-' rating on India, which is the lowest investment grade. The outlook on the rating was positive, from stable, in May, 2024. Phua further said India's fiscal metrics continue to be quite positive and the tax revenue to GDP has grown over the last few years to around 12 per cent currently. The central government deficit has been lower since the pandemic years. S&P believes that the government will meet its fiscal deficit target of 4.8 per cent and 4.4 per cent for the current and the next fiscal respectively.

The CNX Nifty traded in a range of 22,923.85 and 22,812.75. There were 28 stocks advancing against 22 stocks declining on the index. 

The top gainers on Nifty were Shriram Finance up by 4.00%, NTPC up by 3.26%, Mahindra & Mahindra up by 2.72%, Bharat Electronics up by 2.66% and Adani Ports & SEZ up by 2.51%. On the flip side, HDFC Bank down by 2.39%, Maruti Suzuki down by 2.10%, Tech Mahindra down by 1.71%, Tata Consumer Product down by 1.59% and HCL Technologies down by 1.25% were the top losers.

European markets were trading mostly in green; France’s CAC rose 49.69 points or 0.61% to 8,160.23 and Germany’s DAX gained 109.67 points or 0.49% to 22,543.30, while UK’s FTSE 100 decreased 23.55 points or 0.27% to 8,688.98.

Asian markets settled down on Thursday after the minutes of the Federal Reserve's January policy meeting revealed that the US central bank is in no rush to cut interest rates as inflation risks remain in focus, while US President Donald Trump's harsh criticism of Ukrainian President Volodymyr Zelenskyy has also heightened tensions in the ongoing conflict. Japanese shares declined as the yen strengthened to around a two-month high against the US dollar amid rising speculation that the Bank of Japan could raise its benchmark interest rate at its next policy meeting. Moreover, Seoul shares fell on profit booking following tariff pressures and budget cuts from the Donald Trump administration.