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Benchmarks likely to get slightly positive start after two straight sessions of losses
Jan-28-2025

Indian equity benchmarks are likely to get a slightly positive start on Tuesday after two straight sessions of losses. However, a cautious undertone may prevail amid concerns that the emergence of a low-cost Chinese artificial intelligence model and tariff worries after U.S. President Donald Trump said he'll soon impose tariffs on foreign-produced semiconductors. 

Some of the key factors to be watched:

Measures to inject liquidity in banking system: India's central bank announced a host of measures to inject liquidity in the banking system, including bond purchases and dollar/rupee swaps. The Reserve Bank of India will buy government bonds worth Rs 60,000 crore ($6.96 billion) in three tranches and conduct a 56-day variable rate repo auction worth Rs 50,000 crore on February 7.

Persistent foreign fund outflows: Foreign Institutional Investors (FIIs) maintained their aggressive selling streak for the 17th straight session, dumping equities worth Rs 5,015 crore.

Port sector stocks will be in focus: India’s 12 major ports, owned by the central government, handled 72.2 million tonnes (mt) of cargo in December, registering a growth of 3.22 per cent - primarily due to a sizeable decline in iron ore cargo and rising container volumes.

Aircraft MRO industry stocks will be in limelight: Ratings agency Crisill said the Indian aircraft maintenance, repair and overhaul (MRO) industry is expected to see a 50 per cent topline growth to Rs 4,500 crore in FY26 amid fresh demand triggered by airline operators’ expanding fleet size.

Earnings today: Investors will keep an eye on Q3 earnings from companies including Bajaj Auto, Indian Oil, Colgate, Bosch, TVS Motor, Cipla, BHEL, Hyundai Motor, Indian Oil and JSW Energy among others.

On the global front, the US markets ended mostly lower on Monday amid fears of an AI stock bubble bursting due to DeepSeek's competitive AI model, which is said to cost much less than those developed in Silicon Valley. Asian markets are trading mostly in red on Tuesday in thin trade following tech led sell-off on Wall Street.

Back home, Indian equity benchmarks experienced a downward trend for the second straight session and ended with losses of over a percent on Monday, pressured by concerns over weak corporate earnings, uncertainty surrounding U.S. trade and tariff policies, and persistent foreign fund outflows. Finally, the BSE Sensex fell 824.29 points or 1.08% to 75,366.17, and the CNX Nifty was down by 263.05 points or 1.14% to 22,829.15.

Some of the important factors for the markets:

India's forex reserves touch 11-month low: The RBI said India's forex reserves dropped by $1.88 billion to $623.983 billion in the week ended January 17. Earlier, the overall kitty declined by $8.714 billion to $625.871 billion in the week ended January 10.

Profit booking ahead of Union Budget: Another factor contributing to the market’s fall is profit booking by traders ahead of the Union Budget, which is scheduled to be presented on February 1, 2025. The upcoming Union Budget is expected to play a crucial role in shaping market sentiment.

US trade policy concerns: Markets drifted further lower as worries persist over U.S. President Donald Trump's trade and immigration policies. The Trump administration said it was pausing punitive tariffs against Colombia after its leader agreed to grant entry to U.S. military flights carrying deported migrants.  


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