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Benchmarks likely to get optimistic start tracking firm global cues
Jan-29-2025

Indian equity benchmarks are likely to get an optimistic start tracking firm global cues. Investors will be looking ahead to the US Federal Reserve's interest rate decision and inflation outlook in the face of President Donald Trump's tariff threats, the Budget 2025-26 presentation on Saturday, February 1, fore more directional cues.

Some of the key factors to be watched:

64% of industrialists optimistic about India’s growth: Ahead of Union Budget on February 1, a quick survey conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI) noted that about 64 per cent of industrialists expressed optimism regarding India’s growth.

RBI to conduct USD/INR swap auction of $5 billion on Friday to inject liquidity: the Reserve Bank said it will conduct a USD/INR buy-sell swap auction of $5 billion (about Rs 43,000 crore) on January 31, as part of its over Rs 1.5 lakh crore liquidity injection into the banking system.

Sustained FII outflows likely to weigh on sentiments: The Foreign institutional investors (FIIs) sold equities worth Rs 4,920.69 crore on January 28.

No GST on penal charges levied by banks, NBFCs: The Central Board of Indirect Taxes and Customs (CBIC) said Goods and Services Tax (GST) will not be applicable on penal charges levied by banks and non-banking finance companies (NBFCs). It also clarified that GST will not be levied on transactions of up to Rs 2,000 facilitated by payment aggregators on online platforms.

Real estate sector stocks will be in focus: India Ratings and Research (Ind-Ra) said housing prices are likely to rise 3-4 per cent next fiscal on high base effect and better supply. Ind-Ra expects property prices to increase 5-6 per cent year-on-year (YoY) in 2024-25 fiscal, then moderate to 3-4 per cent YoY for 2025-26, due to base effects and new launches.

On the global front, the US markets ended higher on Tuesday with Nvidia and other artificial intelligence-linked technology shares recovering from sharp losses the previous day as investors snapped up bargains. Asian markets are trading in green on Wednesday following Wall Street’s tech-led rebound and as focus turns to the Federal Reserve’s rate decision and US mega-cap earnings.

Back home, Indian equity benchmarks recovered on Tuesday after two straight days of steep decline, spurred by strong buying in banking and rate-sensitive sectors following the Reserve Bank of India’s decision to inject liquidity into the financial system. Finally, the BSE Sensex rose 535.24 points or 0.71% to 75,901.41, and the CNX Nifty was up by 128.10 points or 0.56% to 22,957.25.

Some of the important factors for the markets: 

Banking and financial stocks leading markets surge: The markets rally was driven by gains in banking and financial stocks after the RBI said it will purchase government securities worth Rs 60,000 crore in three tranches and announced several steps in order to inject liquidity into the banking system.  

Oil prices stabilized: Markets found some relief as oil prices retreated after the Trump administration pulled back from sanctions threats against Colombia over illegal immigration, alleviating concern about oil supply disruptions. 

Rupee fell sharply as tariff fears lifted dollar: Indian rupee depreciated by 26 paise to 86.57 (provisional) against the US dollar, as global risk sentiments were dampened amid tariff threats by the US President Donald Trump.


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