Closing Bell | Sensex drops 330 pts, Nifty ends below 23,100; small, midcap indices crack up to 2.4%

The market is haywire, with sentiment so weak that even results in-line with expectations are triggering selloffs. While the broader market is under pressure, positively, large-cap stocks are showing some resilience. From the taper-tantrum to geopolitical risks, the Indian market has borne numerous challenges in its history. Similarly, the ongoing appreciation of the USD could reverse once market yields flatten out, as the Trump administration is to sustain is slowing. This negative market bias is not expected to persist for long. For long-term investors, this is not the time to sell but rather be patient and adopt an accumulation strategy.

The Q3FY25 earnings season has been broadly in line with our tepid expectations; however, management commentary remained uninspiring, further weighing on sentiments. FPI flows are expected to remain volatile. FPI flows to date in Jan’25 were negative for all key emerging markets (except Brazil). India, Indonesia, Malaysia, Philippines, S.Korea, Taiwan, Thailand, and Vietnam, witnessed outflows of US$6,111 mn, US$189 mn, US$519 mn, US$96 mn, US$456 mn, US$1,261 mn, US$283 mn, and US$281 mn, respectively. Brazil witnessed inflows of US$515 mn.

Nifty witnessed a volatile day of trade today. It witnessed selling pressure emerge from the upper end of the broad range 23350 – 23400 and slipped to close in the negative down 113 points. Since the past four trading sessions the Nifty is trading in the broad range of 23000 – 23400. Divergence among the daily and hourly time frame momentum indicator can lead to further consolidation. Bollinger bands are contracting also suggesting a rangebound movement. Thus until, the Nifty does not breach the support zone of 23050 – 23000 we can expect the rangebound price action to continue. Stock specific weakness in the broader market is visible as the small cap index and midcap index were down 2.35% and 1.55% respectively. On the Nifty a breach below 23000 could lead to a fall towards 22670 which coincides with the 38.2% Fibonacci retracement level of the rise form 16828 – 26277.

Indian frontline indices lost their early gains, initially bolstered by optimistic global market trends. The downturn was primarily driven by concerns over moderating corporate earnings, which largely offset the positive impact of lower oil prices and anticipated US rate cuts. The decline was broad-based, with small-cap stocks suffering the most. As the market stayed negative, 11 of the 13 major sectors struggled, except for IT and FMCG. Pharma and Media stocks faced notable pressure, particularly from heavyweight losses post-earnings. Cyient Ltd experienced a sharp drop following weak Q3 results, compounded by the CEO's resignation and lower FY25 growth and margin forecasts.

Shares of Kfin Tech are sharply higher by over 8% on January 24 after Q3FY25 fine print, rebounding from a month-long downtrend that had taken the stock lower by close to 20% from 2024 highs.

The management sounded upbeat in its outlook, and told CNBC-TV18 during an interaction that the inflows have been very strong 'even in a volatile market'. The company is confident of continuing to expand at over 30% growth rate, and said the retail participation too has been increasing, supporting the business and AUM for Kfin Tech.

Kfin's revenue from operations stood at Rs 290 crore, up 32.6% on year, and net profit came in at Rs 90.18 crore, up 34.9% on year, with EBITDA margin at 45%. The management said it expects to sustain margin at these levels.

#1 Net profit up 53% at Rs 109 cr vs Rs 71 cr (YoY)

#2 Revenue up 24.5% at Rs 1,417 cr vs Rs 1,138 cr (YoY)

#3 EBITDA up 47% at Rs 224 cr vs Rs 152 cr (YoY)

#4 Margin at 16% vs 13.4% (YoY)

Comex Gold futures closed modestly lower at $2,765 per ounce as the U.S. dollar retreated from its highs. Support for the metal also came from ECB policymakers, who signaled further rate cuts. Gold prices remained buoyed by safe-haven buying, especially after President Trump expanded his tariff threats on Wednesday, proposing a 10% tariff on goods from China and the EU, along with plans to impose 25% tariffs on goods from Mexico and Canada by February 1. Meanwhile, gold prices did not react significantly to U.S. Initial Jobless Claims, which rose to a six-week high of 223K for the week ending January 18, slightly exceeding the expected 220K. Today, gold prices surged to a three-month high of $2,785 and are set for a fourth consecutive weekly gain, as President Trump reiterated his intention to impose import levies on Europe, China, the EU, Canada, and Mexico to boost U.S. manufacturing during his address at the World Economic Forum. Investors are expected to keep an eye on Flash PMIs for early indications of economic activity in major global economies, as well as U.S. housing data and University of Michigan Consumer Sentiment, for further insights into the state of the U.S. economy.

Comments by U.S. President Donald Trump, in which he stated that he would ask Saudi Arabia and OPEC to lower prices during his virtual address at the World Economic Forum in Davos, caused WTI crude oil prices to drop to a two-week low of $74.10 per barrel on Thursday. Additionally, Trump promised lower taxes to global elites who bring manufacturing to the U.S. and threatened tariffs on those who do not, fueling concerns about potential trade wars. Meanwhile, the EIA reported a decrease of 1.017 million barrels in U.S. crude oil stocks, extending declines for the ninth consecutive week, which contrasted with the API report that had estimated a build of 1 million barrels. Oil prices have been highly volatile in January, surging to $80.70 per barrel in mid-January due to unprecedented U.S. sanctions on Russia. However, the Gaza ceasefire, Trump’s push to boost U.S. oil production, and concerns that potential U.S. tariffs on China and the EU could reduce oil demand have caused a sharp pullback in prices. Today, crude oil prices continue to decline and are set for the first weekly drop of the year, as Trump’s tariff threats, his push for higher U.S. oil output, and his vow to ask OPEC to "bring down the cost of oil" may keep traders on edge.

Shares of Gland Pharma fell over 3 percent on January 24 after the National Stock Exchange (NSE) said that it will be excluding shares of Gland Pharma from the Futures & Options (F&O) segment.

As per the exchange statement, the F&O segment starting January 31 will exclude shares of Castrol India and Gland Pharma. This comes ahead of the company's announcement of its earnings for the quarter and nine months ended December 31, 2024, which is scheduled for February 3, 2025.

#1 Net Profit down 5% at Rs 506 crore Vs Rs 533 crore (YoY)

#2 Revenue falls 7% at Rs 5,271 crore Vs Rs 5,656 crore (YoY)

#3 EBITDA falls 5% at Rs 940 crore Vs Rs 989 crore (YoY)

#4 Margin at 18% Vs 17.5% (YoY)

#1 Net Loss at Rs 4.8 Cr vs net profit of Rs 31.4 Cr (YoY)

#2 Revenue falls 2.4% At Rs 186.8 Cr Vs Rs 191.2 Cr (YoY)

#1 Net Profit down 6.4% at Rs 117.6 Cr Vs Rs 125.6 Cr (YoY)

#2 Revenue down 1.5% at Rs 1,137.6 Cr Vs Rs 1,156 Cr (YoY)

#3 EBITDA down 8% at Rs 230.2 Cr Vs Rs 250.4 Cr (YoY)

#4 Margin At 20.2% Vs 22% (YoY)

QIB – 4.86 times

NII - 177.53 times

Retail – 51.73 times

Overall – 65.29 times

The shares of Capri Global Capital, a diversified NBFC, jumped on Friday, January 24, after posting a standalone net profit of Rs 108 crore for the third quarter ended December 2024, a remarkable increase of over 111% YoY compared to Rs 51.3 crore in the same period last year.

Meanwhile, the company’s total income also grew substantially, rising to Rs 604.2 crore from Rs 477.7 crore year-on-year.

The company’s consolidated net profit rose by 18% in the third quarter of the current financial year, but it still fell short of analysts' expectations. The contract research and manufacturing services firm reported a profit of Rs131 crore for the quarter ended December 31, compared to Rs112 crore in the same period last year, according to an exchange filing on Thursday.

Revenue increased by 11% to Rs943.7 crore, compared to Rs853.5 crore in the year-ago period (Bloomberg estimate: Rs971 crore). EBITDA rose 23% to Rs284 crore, compared to Rs232 crore (Estimate: Rs294 crore).

The stock declined following the company's announcement of a wider net loss for the October-December period compared to the same quarter last year.

The company’s revenue also dropped by 6% on a quarter-on-quarter basis, while its margin narrowed to 9.1% from 14.3% in the September quarter.

Tejas Networks reported a net loss of Rs45 crore, compared to a net profit of Rs8 crore during the same period last year. The company attributed the losses to an increase in inventory levels.

IT firm Cyient Ltd has once again revised its FY25 revenue growth guidance to a decline of 2.7 percent, compared to the previously expected flat growth, and has withdrawn its margin guidance following a 32 percent drop in profit for the December quarter. Additionally, CEO Karthikeyan Natarajan has resigned, with promoter Krishna Bodanapu stepping in as the interim CEO. These developments have led analysts to lower their earnings estimates and target prices for Cyient. While the company reported in-line revenue growth (2.4 percent QoQ in constant currency), experts pointed out that the guidance cut, weak exit margin, and CEO resignation were negative surprises.

#1 Order for optical fiber cables, equipment, maintenance

The Indian markets opened marginally higher, driven by positive global cues on January 24.

The Sensex rose by 197.20 points, or 0.25 percent, to 76,710.16, while the Nifty gained 52.30 points, or 0.23 percent, to 23,257.65. A total of 1,308 shares advanced, 816 shares declined, and 158 shares remained unchanged.

PowerGrid, Tata Steel, NTPC, and Axis Bank were among the gainers in the Sensex Index, while Sun Pharma, Zomato, and Maruti were the top losers

Yesterday, the Indian markets witnessed follow-through buying at the start of the session, followed by sideways trading later in the day. The index managed to close above the 23,200 mark, suggesting a pause in the ongoing downtrend. While global markets traded on a positive note, Foreign Institutional Investors (FIIs) remained net sellers, raising concerns about the sustainability of the upward momentum.

On the downside, if selling pressure persists at higher levels, the Nifty could test 22,800, followed by 22,500. A breach below the 23,000 mark would be a key area of concern. On the upside, immediate resistance is observed at 23,300, with 23,500 acting as a significant hurdle. Given the prevailing volatility, traders are advised to exercise caution, implement strict stop-loss strategies, and avoid carrying long positions overnight unless the Nifty index sustains above the 23,500 mark to effectively manage risk.

Indian rupee opened 14 paise higher at 86.33 per dollar on Friday versus Wednesday’s close of 86.47.

Benchmark indices are trading marginally higher in the pre-opening session.

The Sensex was up 83.47 points or 0.12 percent at 76,615.24, and the Nifty was up  19 points or 0.13 percent at 23,312.

The strength of the US market with S&P 500 setting yet another record high and the 10-year US bond yield remaining strong around 4.65% will continue to weigh on the Indian market. FIIs will continue to sell putting pressure on largecaps like banking. The irrationality in the market characterised by fair and even low valuations for largecaps like banking and excessive valuations in the broader market will have to reverse at some point of time. But we don’t know when that will happen.

The Q3 results of IT companies and the management commentary indicating improving prospects for the sector suggest that the sector is a safe bet now.

The nifty rose for a second day yesterday following Wednesday's hammer, but came off its session highs. The 23426 - 23471 remains a formidable upside hurdle for the benchmark, but the real action is occurring in the NSE mid- and smallcap indexes which significantly outperformed the nifty. The former traced an upside follow through candle yesterday while the latter generated a "bullish piercing line" formation. All the headline indices remain below the major daily moving averages - 50/100/200, so its important to tread with caution as the market starts to probe higher levels.

#1 Dr Reddy’S Q3 profit below estimate; Margin At 27.5% Vs 29.3% YoY

#2 Mankind Pharma Q3 profit misses expectations as expenses jump

#3 Indus Towers net profit jumps over 2-fold YoY; To enter EV charging infra space

#4 Tejas Networks swings to profit in Q3; Margin At 14% (YoY)

#5 Amber Enterprises reports all-round beat in Q3; profit at Rs 37 cr vs loss of Rs 0.5 cr (YoY)

#6 United Spirits Q3 net profit down 4.3% (YoY); below estimate

#7 HPCL Q3 net profit jumps multi-fold (QoQ); average GRM at $6.01/barrel vs $8.49/barrel (YoY)

#8 Cyient cuts FY25 Guidance; Q3 profit down 31.7% QoQ

#9 Jyoti Structures gets notification of award for a project worth Rs 741.28 cr from Power Grid

#10 Patanjali Foods: FSSAI directs company to recall entire batch of Red Chilli Powder

#11 Akums Drugs: I-T dept conducted search at offices, manufacturing units, subsidiaries & residences of MD & CEO

Eye care services provider Dr Agarwal’s Health Care, the parent company of the listed entity Dr Agarwals Eye Hospital, will open its Rs 3,027-crore initial public offering for subscription on January 29. The price band for the offer was set at Rs 382-402 per share. The anchor book of the IPO will be opened on January 28.

The company in consultation with merchant bankers - Kotak Mahindra Capital Company, Morgan Stanley India Company, Jefferies India, and Motilal Oswal Investment Advisors - will finalise IPO share allotment by February 3, while the trading in its equity shares will commence on the BSE and NSE, effective February 5.

JSW Steel, Hindustan Petroleum Corporation, Bank of India, InterGlobe Aviation, Godrej Consumer Products, DLF, AU Small Finance Bank, Aditya Birla Money, DAM Capital Advisors, DCB Bank, Fedbank Financial Services, Granules India, Jindal Saw, Laurus Labs, Shriram Finance, Solara Active Pharma Sciences, Supriya Lifescience, Torrent Pharmaceuticals, Trident, and Ugro Capital will release their quarterly earnings scorecard on January 24.

Asian equities advanced, tracking Wall Street’s record-setting rally in technology stocks. Investors are also focused on the Bank of Japan's policy decision, where a rate hike is anticipated later Friday.

Regional benchmarks rose in Hong Kong, Sydney, and Seoul, with Japanese shares climbing for a fifth consecutive session as the yen edged lower ahead of the BOJ announcement. Chinese stocks fluctuated after the China Securities Regulatory Commission urged mutual funds to increase onshore equity holdings by at least 10% annually over the next three years. Additionally, state-owned insurers must allocate 30% of new policy premiums to investments starting in 2025.

Oil markets dropped on Friday after US President Donald Trump called on OPEC and its leader, Saudi Arabia, to reduce prices by increasing crude production.

Brent crude futures declined 50 cents to $77.95 per barrel, while U.S. West Texas Intermediate (WTI) fell 31 cents to $74.31. Speaking at the World Economic Forum in Davos, Switzerland, Trump emphasized his intent to push OPEC to bring down crude costs.

#1 GIFT Nifty signals positive start

#2 Wall Street on track for second weekly gain

#3 Trump says he’ll ‘demand that interest rates drop immediately’

#4 European markets end higher

#5 10-year yield ticks up; USD dips as markets await clarity on tariff

#6 Crude oil on pace for largest weekly decline since November

#7 Gold heads for 4th straight weekly gain

#8 Trump calls for OPEC to lower oil prices

#9 Trump signs executive order promoting crypto paving way for digital asset stockpile

A late-session rebound in technology stocks drove major US indexes to all-time highs, supported by President Donald Trump’s call for lower oil prices and interest rates. The S&P 500 rose 0.5%, surpassing the 6,100 milestone as approximately 330 of its components gained. The Nasdaq 100 added 0.2%, while the Dow Jones Industrial Average surged 0.9%. Bloomberg’s “Magnificent Seven” index of top tech firms edged up 0.2%, and the Russell 2000 climbed 0.5%. Meanwhile, the Philadelphia Semiconductor Index narrowed earlier losses to close down 0.4%.

Indian equity indices on Thursday ended on a positive note with Nifty at 23,200 on January 23. At close, the Sensex was up 115.39 points or 0.15 percent at 76,520.38, and the Nifty was up 50 points or 0.22 percent at 23,205.35. About