Post Session: Quick Review

Indian equity benchmarks snapped five-day losing streak on Monday, ahead of quarterly earnings updates from IT majors. Markets made a negative start and remained under selling pressure in early trade, amid continued selling by foreign institutional investors. However, in afternoon session, indices recovered from the initial losses and remained higher in second half of the session, as traders took some support after US ambassador-designate Sergio Gor said that no country is as essential as India for Washington and both sides are actively engaged in firming up a trade deal.

Some of the important factors in trade:

India registers robust growth in exports to Spain, Germany, Belgium: Traders took some support as commerce ministry’s data stated that Spain, Germany, Belgium, and Poland are emerging as India’s key export destinations within the 27-nation European Union (EU) bloc.

India needs to focus on generating skilled jobs, improving employment quality in short-term: Traders took note of S Mahendra Dev’s, chairman of Economic Advisory Council to the Prime Minister (EAC-PM), statement that India’s short-term goals include generating skilled jobs and improving employment quality.

Forex reserves drop by $9.80 billion to $686.80 billion: Traders overlooked the Reserve Bank of India’s (RBI’s) data that showed India's forex reserves dropped by $9.80 billion to $686.80 billion in the week to January 2.  

Global front: European markets were trading mostly in red amid concerns about rising geopolitical tensions. However, Asian equity markets ended mostly in green as a rally in Chinese AI stocks boosted sentiments.

The BSE Sensex ended at 83878.17, up by 301.93 points or 0.36% after trading in a range of 82861.07 and 83962.33. There were 24 stocks advancing against 6 stocks declining on the index. (Provisional)

The broader indices ended in red; the BSE Mid cap index was down by 0.41%, while Small cap index down by 0.68%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 1.92%, Basic Materials up by 1.06%, PSU up by 0.93%, Energy up by 0.85% and Oil & Gas up by 0.63%, while Realty down by 1.13%, Capital Goods down by 0.82%, Industrials down by 0.67%, Healthcare down by 0.51% and Telecom down by 0.46% were the top losing indices on BSE. (Provisional)

The top gainers on the Sensex were Tata Steel up by 2.72%, Asian Paints up by 2.64%, Trent up by 1.92%, SBI up by 1.54% and Hindustan Unilever up by 1.32%. On the flip side, Bajaj Finance down by 1.06%, Infosys down by 0.99%, Bharat Electronics down by 0.24%, HDFC Bank down by 0.16% and Interglobe Aviation down by 0.10% were the top losers. (Provisional)

Meanwhile, Charting India’s path to inclusive growth, S Mahendra Dev, chairman of Economic Advisory Council to the Prime Minister (EAC-PM), has said that the country’s short-term goals include generating skilled jobs and improving employment quality. He admitted that the country was lagging in employment quality, which he asserted is one of the important components in achieving inclusive growth. He said ‘In the post COVID years, from 2022-23 to 2025-26, the average growth rate is 7.7 per cent and so we have recovered. India is resilient. We are pushing investments and exports despite all the constraints. The focus is on employment generation and skilled jobs. We are lagging behind in employment quality.’

He noted that 'Viksit Bharat 2047' does not just mean achieving growth but also inclusive growth. He highlighted that ‘Quality employment is one of the important components in achieving inclusive growth. We have issues in employment like gig workers, women's participation rates, creating employment for youth, technology including AI. Education, health, nutrition are also part of efforts in reducing inequalities. These are the areas where inclusion can be increased’. About long-term goals, he said to achieve Viksit Bharat 2047 goal there are two drivers of growth, which include increasing investment rate and domestic savings, and promoting exports. He also pointed towards diversifying exports, GST, income tax reforms and labour codes, as well as quality control orders and inclusion of the private sector in nuclear power. He said many countries achieved structural transformation through manufacturing and services, and noted that India still requires strong manufacturing growth to generate labour-intensive employment. 

He rejected the notion of choosing between manufacturing and services, calling the two sectors complementary rather than competing. Emphasising manufacturing's strong backward and forward linkages, he said it also drives growth in services, as modern manufacturing increasingly incorporates service components such as AI. He said for sustained expansion of the service sector, a robust manufacturing base is required. He noted ‘what we want to achieve by 2047 is not unique. India has progressed on many fronts. The task is now to move towards a society and economy that is not only prosperous but also inclusive and pro-nature’.

The CNX Nifty ended at 25790.25, up by 106.95 points or 0.42% after trading in a range of 25473.40 and 25813.15. There were 39 stocks advancing against 11 stocks declining on the index. (Provisional)

The top gainers on Nifty were Coal India up by 3.33%, Tata Steel up by 2.71%, Asian Paints up by 2.51%, Hindalco up by 2.13% and Trent up by 2.10%. On the flip side, Infosys down by 1.13%, Tata Motors Passenger down by 1.02%, Eicher Motors down by 0.95%, Bajaj Finance down by 0.80% and Bajaj Auto down by 0.75% were the top losers. (Provisional)

European markets were trading mostly in red; France’s CAC fell 27.49 points or 0.33% to 8,334.60 and UK’s FTSE 100 decreased 10.4 points or 0.1% to 10,114.20, while Germany’s DAX gained 94.66 points or 0.37% to 25,356.30.

Asian markets settled mostly higher on Monday buoyed by continued optimism and strong performance of AI and chipmaking stocks across the region. Stock market of Japan was closed for a holiday. South Korea’s Kospi closed at an all-time high. Hang Seng soared the most among Asian indices as China advances in key technologies and expectations of further policy support reinforced bullish sentiment.