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Key gauges extend gains for third consecutive day
Jan-30-2025

Indian equity benchmarks exhibited some volatility on the monthly expiry day but managed to end higher for 3rd consecutive day on Thursday as all eyes are now on Union Budget 2025, where investors hope for growth-boosting measures balanced with fiscal discipline.

Some of the important factors for the markets:

Govt launches new credit guarantee scheme for MSME sector: The finance ministry has said that 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.

India needs fiscal policy changes for 6.4% GDP growth rate in 2025: Moody's Analytics said India needs to change its fiscal and monetary policy to achieve a 6.4 per cent GDP growth in 2025 amid a weak rupee, declining foreign investment and volatile inflation.

US Treasury yields slip: U.S. Treasury yields were slightly lower as investors weighed the Federal Reserve’s first interest rate decision of 2025. The US Federal Reserve decided to hold its key interest rate steady, maintaining it in the range of 4.25%-4.5%. 

Falling crude oil prices: Oil prices edged lower pressured by a rise in U.S. crude inventories and concerns over China’s oil demand outlook.     

Global cues: 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.

Finally, the BSE Sensex rose 226.85 points or 0.30% to 76,759.81, and the CNX Nifty was up by 86.40 points or 0.37% to 23,249.50.     

The BSE Sensex touched high and low of 76,962.88 and 76,401.13 respectively. There were 20 stocks advancing against 11 stocks declining on the index.

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

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 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 down by 0.26% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.78%, Power Grid Corporation up by 2.59%, Bajaj Finance up by 1.82%, Nestle up by 1.73% 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 & SEZ down by 1.86% and Zomato down by 1.66% were the top losers.

Meanwhile, 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. This is a sharp slowdown from the 22.5 per cent growth recorded in the previous fiscal year.

It said ‘Indian banks face margin pressures as loan growth slows amid high interest rates... Net interest margins at most lenders are expected to edge lower, the estimates show. Weaker NIMs are expected as deposit rates catch up and monetary easing looms.’ However, despite the slowdown in loan growth, it stated that the Indian banks continue to report higher net profits, although at a slower pace.

Moreover, it suggested that net interest margins (NIMs) of most banks are likely to decline in the coming months as deposit rates catch up and monetary easing comes into play. Many banks have adjusted their lending strategies, reducing consumer loans while focusing more on mobilising retail deposits to strengthen their balance sheets. The Reserve Bank of India (RBI) has maintained its benchmark interest rates at a high level, even as central banks in the US and Europe began easing their monetary policies in 2024.

The CNX Nifty traded in a range of 23,322.05 and 23,139.20. There were 35 stocks advancing against 15 stocks declining, while 1 stock remained unchanged on the index. 

The top gainers on Nifty were Bharat Electronics up by 4.87%, Power Grid Corporation up by 2.80%, Hero MotoCorp up by 2.76%, Bharti Airtel up by 2.63% and Cipla up by 2.53%. On the flip side, Tata Motors down by 6.98%, ITC Hotels down by 5.00%, Adani Enterprises down by 3.05%, Shriram Finance down by 2.29% and Bajaj Finserv down by 2.26% were the top losers. 

European markets were trading higher; UK’s FTSE 100 increased 19.81 points or 0.23% to 8,577.62, France’s CAC rose 35.97 points or 0.46% to 7,908.45 and Germany’s DAX gained 55.87 points or 0.26% to 21,693.40.

Asian markets ended mixed in thin holiday trade on Thursday as markets in China, Hong Kong, Singapore, South Korea, Malaysia and Taiwan were closed for the Lunar New Year holidays. Market sentiments mixed further by tracking Wall Street’s fall overnight after the US Federal Reserve left interest rates steady and signalled that it is in no rush to cut interest rates, while participants are cautiously awaiting clarity on US President Trump's tariff policies, especially on Canada, Mexico and China. Japanese markets gained as semiconductor shares such as Advantest continued to recover from DeepSeek concerns.

Nikkei 225 settled up by 99.19 points 0.25% to 39,513.97; and Jakarta Composite settled down by 92.58 points or 1.31% to 7,073.48. 
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