Markets continue sluggish trade; Sensex plunges over 800 points

Indian equity benchmarks continued their sluggish trade in morning session, with Sensex and Nifty falling more than 800 and 250 points, respectively, mirroring deep cuts in global markets after the latest announcement of additional 10 per cent tariff on Chinese products rattled investors. Sentiments got hit as exchange data showed Foreign Institutional Investors (FIIs) offloaded equities worth Rs 556.56 crore in the capital markets on net basis on Thursday. Traders took a note of Finance Minister Nirmala Sitharaman’s statement that India needs to ramp up its bilateral relations for trade and investment, as the world is witnessing a churn, and bilateralism seems to be the new catalyst tool. She said these are very interesting yet challenging times and the government is making all efforts to make India move up the ladder and be an engine of global growth. On the global front, Asian markets are trading lower following the broadly negative cues from Wall Street, with markets in China, Hong Kong, South Korea and Indonesia tumbling as traders react to US President Donald Trump's confirmation that tariffs on Mexico and Canada would proceed next week, along with an additional 10 percent tariff on China.

The BSE Sensex is currently trading at 73796.57, down by 815.86 points or 1.09% after trading in a range of 73579.44 and 74282.43. There were 3 stocks advancing against 27 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 1.85%, while Small cap index was down by 1.95%.

The top losing sectoral indices on the BSE were IT down by 3.40%, TECK down by 3.07%, Auto down by 2.55%, Telecom down by 2.24% and Consumer Discretionary down by 1.78%, while there were no gaining sectoral indices on the BSE. 

The few gainers on the Sensex were Reliance Industries up by 0.68%, HDFC Bank up by 0.41% and Axis Bank up by 0.36%. On the flip side, Tech Mahindra down by 4.86%, Indusind Bank down by 4.14%, HCL Technologies down by 3.82%, Maruti Suzuki down by 3.69% and Mahindra & Mahindra down by 3.53% were the top losers.

Meanwhile, National Council of Applied Economic Research (NCAER) in its monthly economic review has said that moderation in inflation to five-month low of 4.3 per cent in January has provided Reserve Bank of India (RBI) more space to cut interest rate in policy meet. Recently, RBI reduced the policy repo rate by 25 basis points to 6.25 per cent. The upcoming monetary policy committee meeting is to be held in April. Despite the global headwinds, NCAER said some of the high-frequency indicators of the Indian economy have turned kinder and the developing turnaround is visible in indicators like Purchasing Managers' Index for manufacturing, GST collections and non-EV and EV sales.

PMI for manufacturing increased to 57.7 in January, signalling expansion, while PMI for services remained at an elevated level of 56.5. As per the economic think tank, GST collections, gross and net, achieved robust double-digit growth of 12.3 per cent and 10.9 per cent, respectively in January 2025, as compared to subdued a growth of 7.3 per cent and 3.3 per cent in December 2024. While talking about inflation and scope for rate cuts, NCAER Director General Poonam Gupta has said that moderation in inflation (headline inflation to 4.3 per cent) has opened up more policy space. The agriculture sector is also exhibiting much-needed resilience, which bodes well for both inflation control and rural push to the economy.

Further, she added that the continued outflow of FIIs is another factor that needs to be monitored as the Empirical studies show that FII flows are driven more by external factors than by domestic ones, and hence are quite volatile in nature. As in the past, the current phase of reversal of FII flows from India is a global phenomenon and is associated with reversals from many other emerging markets.

The CNX Nifty is currently trading at 22291.05, down by 254.00 points or 1.13% after trading in a range of 22224.10 and 22450.35. There were 6 stocks advancing against 44 stocks declining on the index.

The top gainers on Nifty were Coal India up by 2.57%, Shriram Finance up by 0.74%, Reliance Industries up by 0.68%, Grasim Industries up by 0.51% and Axis Bank up by 0.32%. On the flip side, Tech Mahindra down by 4.95%, Indusind Bank down by 4.21%, Wipro down by 3.82%, HCL Technologies down by 3.74% and Maruti Suzuki down by 3.65% were the top losers.

All Asian markets are trading lower; Nikkei 225 slipped 1155.38 points or 3.02% to 37,100.79, Hang Seng declined 606.07 points or 2.56% to 23,112.22, KOSPI dropped 88.35 points or 3.37% to 2,533.40, Straits Times fell 24.4 points or 0.62% to 3,896.79, Jakarta Composite plunged 185.31 points or 2.94% to 6,300.14 and Shanghai Composite weakened 35.83 points or 1.06% to 3,352.23.