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Markets rise for 4th straight day ahead of Budget
Jan-31-2025

Indian equity benchmarks continued their northward march for the fourth consecutive session on Friday, with optimism around upcoming Union Budget and expectations for a rate cut by RBI next week helping underpin sentiment. The Economic Survey 2025, tabled by union finance minister Nirmala Sitharaman, has also provided a sentimental boost, contributing to today's gains. 

Some of the important factors for the markets:

Economic survey positively impacted market momentum: The Economic Survey 2024-25 tabled in Parliament said India is expected to record GDP growth of 6.3-6.8 per cent in the financial year 2025-26 on the back of strong fundamentals, calibrated fiscal consolidation and stable private consumption. 

Impressive Q3 numbers from Indian Inc: Better-than-expected results from major companies contributed to upward trend. Larsen & Toubro (L&T), Punjab National Bank (PNB), GAIL (India) and Biocon reported good set of numbers.  

Shares of railway stocks experienced sharp uptick: Shares of railway-related stocks witnessed a strong rally, fueled by expectations that the upcoming budget will allocate increased capital expenditure (capex) to Indian Railways. 

Foreign fund outflows: Foreign Institutional Investors (FIIs) offloaded equities worth Rs 4,582.95 crore in the capital markets on a net basis on Thursday, according to exchange data. But, the pace of selling has slowed down. 

Strong global cues too aided the sentiment: European markets were trading higher as investors continued to cheer the European Central Bank's rate cut decision and the dovish remarks suggesting the possibility of more monetary easing in the coming months. Asian markets ended mostly in green following encouraging earnings updates from Apple and Intel. 

Finally, the BSE Sensex rose 740.76 points or 0.97% to 77,500.57, and the CNX Nifty was up by 258.90 points or 1.11% to 23,508.40.      

The BSE Sensex touched high and low of 77,605.96 and 76,833.87 respectively. There were 25 stocks advancing against 6 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 1.76%, while Small cap index was up by 1.83%.

The top gaining sectoral indices on the BSE were Capital Goods up by 3.89%, Industrials up by 3.61%, Consumer Durables up by 2.77%, PSU up by 2.59% and Power up by 2.56%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Larsen & Toubro up by 4.31%, Nestle up by 4.25%, Indusind Bank up by 3.66%, Titan Company up by 3.59% and Tata Motors up by 2.73%. On the flip side, Bharti Airtel down by 0.76%, Bajaj Finserv down by 0.43%, Bajaj Finance down by 0.17%, ICICI Bank down by 0.14% and Sun Pharma down by 0.12% were the top losers.

Meanwhile, domestic rating agency Crisil in its latest report has said that the cumulative recovery rate of security receipts (SRs) for asset reconstruction companies (ARCs) is set to jump for the second straight year on the back of better show in infrastructure sector and other factors. It stated the cumulative recovery rate of security receipts is likely to jump by up to 15 percentage points per annum, touching 75-80 per cent by FY26.

It attributed the improvement to healthy performance of stressed assets in key infrastructure sectors like real estate, thermal power and roads; higher share of retail and low vintage assets; and lower growth in new acquisitions in comparison to incremental recoveries. It said improving performance of stressed assets in these infrastructure sectors and the deterrence effect of the Insolvency and Bankruptcy Code (IBC) are impelling debt restructuring, which is emerging as a most-preferred resolution strategy and a win-win for both promoters of the stressed assets and ARCs.

The rating agency said it analysed Rs 38,000 crore worth of security receipts to arrive at the estimates. Next fiscal, out of an expected recovery of Rs 12,000 crore for Crisil-rated SRs, about half will be from stressed assets in the real estate, thermal power and roads sectors as against 34 per cent in FY25. Its senior director Mohit Makhija said three factors responsible for the rising ARC cash flows have converged in the past 2-3 fiscal years. He elaborated that stressed residential real estate projects have turned viable as property prices rose and inventories declined in the top six cities, while thermal power plants have seen demand growing amid adequate coal availability and timely payment by discoms.

The CNX Nifty traded in a range of 23,546.80 and 23,277.40. There were 44 stocks advancing against 7 stocks declining on the index. 

The top gainers on Nifty were Tata Consumer Products up by 6.24%, Bharat Electronics up by 5.47%, Trent up by 4.61%, Coal India up by 4.49% and Larsen & Toubro up by 4.18%. On the flip side, Bharti Airtel down by 0.82%, ITC Hotels sown by 0.77%, JSW Steel down by 0.65%, ICICI Bank down by 0.21% and Bajaj Finserv down by 0.16% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 20.29 points or 0.23% to 8,667.17, France’s CAC rose 22.11 points or 0.28% to 7,963.75 and Germany’s DAX gained 36.65 points or 0.17% to 21,763.85.

Asian markets settled mostly higher on Friday, tracking Wall Street’s gains overnight driven by strong profit reports from Tesla, IBM and Meta Platforms. Japanese shares gained marginally as a slew upbeat data fuelled the prospect of further interest rate hikes from the Bank of Japan. Data showed that Japan's industrial output unexpectedly grew in December and retail sales hit a six-month high, Tokyo consumer price index for January increased to 3.4% from 3% in the previous month, while the unemployment rate also dropped unexpectedly to 2.4% in January. But, Seoul shares declined amid a sell-off in technology shares on concerns over China's growing AI capabilities, and US tariff worries lingered. Markets in China, Hong Kong and Taiwan were remained closed for the Lunar New Year holiday.

Asian Indices

Last Trade            

Change in Points

Change in %      

Shanghai Composite

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--

--

Hang Seng

--

--

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Jakarta Composite

7,109.20

35.72

0.50

KLSE Composite

1,556.92

4.23

0.27

Nikkei 225

39,572.49

58.52

0.15

Straits Times

3,855.82

54.75

1.42

KOSPI Composite

2,517.37

-19.43

-0.77

Taiwan Weighted

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