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Post Session: Quick Review
Jan-30-2025

Indian equity benchmarks ended higher for third consecutive day with Nifty and Sensex settling above the psychological 23,200 and 76,700 levels, respectively. During the day, markets went through volatility amid monthly F&O expiry. After making cautious start, markets extended their gains but in late afternoon session turned flat however, once again spiked up to end higher. 

Some of the important factors for the markets:

U.S. Fed left interest rates unchanged: The Federal Reserve left its benchmark interest rate unchanged at 4.25 percent to 4.5 percent after cutting it three times in a row last year, a sign of a more cautious approach as the Fed seeks to gauge where inflation is headed and what policies President Donald Trump may pursue.

Indian banks facing margin pressure as loan growth slows: S&P Global Market Intelligence in its latest report has said that Indian banks are facing margin pressure as loan growth slows amid high interest rates. It highlighted that the aggregate loan growth of six of India's largest banks--both private and state-owned--is expected to decline to 12.3 per cent in the fiscal year ending March 31, 2025.

Government launches new credit guarantee scheme for the MSME sector: The government launched a new credit guarantee scheme for the MSME sector covering loans up to Rs 100 crore in line with the FY25 Budget announcement.

Global front: European markets were trading higher ahead of an expected interest-rate cut by the European Central Bank (ECB) later in the day. Asian markets ended mixed as investors digested broadly positive tech earnings from the U.S. and awaited clarity on U.S. President Trump's tariff policies, especially on Canada, Mexico and China.

The BSE Sensex ended at 76,759.81, up by 226.85 points or 0.30% after trading in a range of 76,401.13 and 76,962.88. There were 19 stocks advancing against 12 stocks declining on the index. (provisional)

The broader indices ended mixed; the BSE Mid cap index declined 0.04%, while Small cap index was up by 0.02%. (provisional)

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.59%, Energy up by 1.52%, Realty up by 1.49%, PSU up by 1.32% and Healthcare was up by 1.14%, while Consumer Durables down by 1.90%, IT down by 0.94%, Consumer Disc down by 0.39%, TECK down by 0.27% and Auto was down by 0.26% were the top losing indices on BSE. (provisional)

The top gainers on the Sensex were Bharti Airtel up by 2.78%, Power Grid up by 2.59%, Nestle up by 2.15%, Bajaj Finance up by 1.82% and Mahindra & Mahindra up by 1.51%. On the flip side, Tata Motors down by 7.37%, ITC Hotels down by 4.98%, Bajaj Finserv down by 2.12%, Adani Ports down by 1.86% and Tech Mahindra down by 1.79% were the top losers. (provisional)

Meanwhile, amid a weak rupee, declining foreign investment and volatile inflation, Moody's Analytics has said India needs to change its fiscal and monetary policy to achieve a 6.4 per cent GDP growth in 2025. It expects the 2025-26 Union Budget to support domestic demand, particularly investment while aiming for a fiscal deficit of less than 4.5 per cent of GDP for the next fiscal. In 2023-24, the fiscal deficit was 5.6 per cent of GDP, which is estimated to come down to 4.9 per cent in the current fiscal.

It said ‘India is facing a bumpy road in 2025. A weakening rupee, declining foreign investment, and volatile inflation are the areas of greatest economic risk. Changes in fiscal and monetary policy, likely in the first half of the year, is needed if India is to achieve 6.4 per cent growth’. Moody's said that while India had one of the fastest-growing economies in Asia in 2024, GDP growth waned over the first three quarters. GDP growth likely picked up in the December quarter, resulting in an overall expansion of 6.8 per cent in 2024. That compares with 7.8 per cent in 2023.

Moody's Analytics said the rupee has weakened significantly since the start of the US Federal Reserve's easing cycle in September. Donald Trump's win in the US presidential race only put more pressure on the rupee as investors sold Indian assets, jumping on a greenback rally. Despite interventions by the Reserve Bank of India, the rupee lost more ground in the opening weeks of 2025, hitting a record low of Rs 86.6 to the US dollar in mid-January.

It also expects inflation to cool to 4.7 per cent in 2025 from 4.8 per cent in 2024. Food inflation should ease, but the tumbling rupee will likely add to input costs, driving up imported inflation. Currency weakness may also delay rate cuts. It added ‘India faces a challenging 2025; growth is slowing, the rupee looks set to tumble against the greenback, and headline inflation is far from the midpoint of the central bank's target range’.

The CNX Nifty ended at 23,249.50, up by 86.40 points or 0.37% after trading in a range of 23,139.20 and 23,322.05. There were 35 stocks advancing against 15 stocks declining on the index. (provisional)

The top gainers on Nifty were Bharat Electronics up by 4.32%, Power Grid Corp up by 2.61%, Hero MotoCorp up by 2.59%, Bharti Airtel up by 2.52% and Cipla up by 2.35%. On the flip side, Tata Motors down by 7.40%, Adani Enterprises down by 2.85%, Shriram Finance down by 2.75%, Bajaj Finserv down by 2.52% and Adani Ports down by 1.81% were the top losers. (provisional)

European markets were trading higher; UK’s FTSE 100 increased 12.88 points or 0.15% to 8,570.69, France’s CAC rose 25.44 points or 0.32% to 7,897.92 and Germany’s DAX was up by 43.93 points or 0.2% to 21,681.46.
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