Key gauges trim some gains in morning deals

Indian equity benchmarks trimmed some gains but continued to trade in green in morning deals, led by gains in Healthcare, Basic Materials and Metal stocks. Traders took support with A UN report stating that India and China saw strong trade growth in Q4 2024. However, gains remain capped as some concern came with the rating agency Crisil’s report stating that India's merchandise trade deficit will be under pressure in the fiscal year 2026, as domestic private consumption is expected to remain strong, maintaining imports up. It said India's exports could also come under pressure due to the slowing economy and tariff related conditions in the United States. Meanwhile, the commerce ministry's investigation arm DGTR has recommended anti-dumping duty of up to $20.87 per kilogram on import of a certain kind of vitamin, used for animal consumption, from China, the European Union and Switzerland for five years. 

On the global front, Asian markets are trading mostly in green after China pledged more steps to revive consumption. Back home, on the sectoral front, banking stocks remained in watch as rating agency India Ratings stated that the gap between credit and deposit growth in the banking system is expected to decline sharply to 80 basis points (bps) in the next financial year from an average of 386 bps over the FY22-Q3FY25 period. 

The BSE Sensex is currently trading at 74108.64, up by 279.73 points or 0.38% after trading in a range of 73796.06 and 74376.35. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.56%, while Small cap index was up by 0.39%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.19%, Basic Materials up by 0.71%, Metal up by 0.68%, Auto up by 0.67% and Bankex up by 0.53%, while IT down by 0.37%, FMCG down by 0.23%, Realty down by 0.23%, Oil & Gas down by 0.14% and TECK down by 0.13% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 3.48%, Zomato up by 2.66%, Bajaj Finserv up by 2.37%, Adani Ports &SEZ up by 1.68% and Sun Pharma up by 1.65%. On the flip side, Nestle down by 1.35%, Asian Paints down by 0.89%, Power Grid Corporation down by 0.82%, Tech Mahindra down by 0.73% and SBI down by 0.56% were the top losers.

Meanwhile, the UN Trade and Development (UNCTAD) in its Global Trade Update said that the developing nations, particularly India and China, saw better than average trade expansion in the fourth quarter of 2024, while many developed nations experienced trade contractions during the same period. However, it has warned about a potential slowdown in global economy in upcoming quarters. The report showed that the global trade expanded by nearly $1.2 trillion in 2024, reaching $33 trillion a result of a 9 per cent rise in services trade and a 2 per cent increase in goods trade with India and China exhibiting stronger trade momentum in Q4 2024 while the US remained a key driver. 

The report noted that India recorded an 8 per cent quarterly imports growth in goods trade in Q4 2024 over the previous quarter and an annual imports growth of 6 per cent, while the quarterly exports growth in goods stood at 7 per cent and annual exports growth was 2 per cent. As per the report, Indian service imports showed 7 per cent quarterly growth and an annual growth of 10 per cent in Q4 2024, while quarterly exports growth stood at three per cent and annual exports growth in services stood at 10 per cent. It indicated that goods trade imbalances widened during 2024, driven by a growing United States deficit and a rising Chinese surplus fuelled by strong exports and steady demand. 

UNCTAD hinted trade to remains stable in early 2025 but also warned about possible trade disruptions on the back of mounting geoeconomic tensions, protectionist policies, and trade disputes. In the first months of 2025, there has been a noticeable reduction in demand for container shipping, as reflected by a significant decrease in the Shanghai Containerized Freight Index (SCFI). While these indices suggest lower shipping costs, they also indicate reduced global demand for both intermediate inputs and processed goods. The decline in the SCFI points to weaker trade volumes, signalling a slowdown in global economic activity. The report indicated that this slowdown may further suggest an incoming contraction in global trade and reduced economic activity, as lower demand for bulk shipping is typically associated with weaker industrial output and slower growth in key sectors.

As per UNCTAD, the growing trend of the implementation of protectionist trade policies and tariffs are expected to have significant repercussions on global and regional value chains and these disruptions could lead to shifts in production and sourcing patterns, as companies and countries adjust to new trade barriers and seek to mitigate the costs of these tariffs. It added that the prioritisation of national concerns and the urgency to fulfil climate commitments will likely continue to shape changes in both industrial and trade policies into 2025. Moreover, a rise in trade-restrictive measures and inward-looking industrial policies designed to support the production of sustainable and environmentally friendly products is expected to negatively affect the growth of international trade, particularly in strategic sectors and critical minerals. 

The CNX Nifty is currently trading at 22471.10, up by 73.90 points or 0.33% after trading in a range of 22353.15 and 22577.00. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Dr. Reddy's Lab up by 3.36%, Indusind Bank up by 3.26%, SBI Life Insurance up by 2.84%, Bajaj Finserv up by 2.17% and Cipla up by 2.06%. On the flip side, Wipro down by 1.67%, BPCL down by 1.61%, Nestle down by 1.48%, Britannia Industries down by 1.22% and Hero MotoCorp down by 1.00% were the top losers. 

Asian markets are trading mostly in green; Nikkei 225 surged 479.28 points or 1.29% to 37,532.38, Taiwan Weighted added 241.06 points or 1.1% to 22,209.11, Hang Seng advanced 316.66 points or 1.3% to 24,276.64, KOSPI increased 41.29 points or 1.61% to 2,607.65, Straits Times rose 31.83 points or 0.83% to 3,867.85 and Shanghai Composite strengthened 9.74 points or 0.28% to 3,429.30.

On the flip side, Jakarta Composite plunged 56.97 points or 0.87% to 6,458.66.