On the monthly expiry day, the Sensex and Nifty extended their winning streak to a third session on January 30, driven by gains in financial and oil & gas stocks, while IT and auto stocks acted as a drag. With the U.S. Fed meet outcome behind us, investor focus has now shifted to the upcoming Union Budget 2025, poised to dictate the market's next move.
At close, the Sensex was up 227 points or 0.3 percent at 76,760, and the Nifty was up 86 points or 0.4 percent at 23,250. About 2,051 shares advanced, 1,734 shares declined, and 117 shares were unchanged. The indices are down about 11 percent each from their record highs on September 27, 2024.
"In the last two days, we've seen some short-covering, but to say that we're out of the woods would be premature. The Budget will be the key factor determining the market's next move," said Alok Churiwala, MD, Churiwala Securities.
Adding to market jitters, FPIs have dumped Rs 81,600 crore worth of Indian equities in January, marking the second-largest monthly outflow on record. Elevated US Treasury yields and tepid domestic earnings have kept foreign investors on the sidelines.
"Typically, FIIs are active in December with selling, and we usually expect fresh buying by the second or third week of January. But this time, uncertainty surrounding the new US administration is creating hesitation," Churiwala said.
"The big question is how Indian exporters will be impacted by potential changes in US trade policy. If clarity emerges on that front, we might see foreign fund flows reversing. Alternatively, if the Budget introduces measures to attract foreign investment, that could also help," he added.
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Churiwala emphasized that India's $5 trillion economy ambition hinges on foreign inflows. "While domestic SIPs and mutual fund investments have provided support, they cannot indefinitely absorb foreign selling. There needs to be a concrete policy push to bring FIIs back."
With markets rallying for three days, is this the start of a pre-Budget surge? Not quite, says Jigar Patel, Senior Manager of Equity Research, Anand Rathi Shares & Stock Brokers.
"The market was heavily oversold, so this is more of a relief rally than a pre-Budget rally. FIIs have been buying in stock futures for the last four to five days, purchasing Rs 1,800 crore daily in key stocks—that's the real driver," he said.
On the technical front, Patel sees 23,000-23,400 as the trading range, with 23,400 acting as strong resistance. "The expiry is likely to be positive to slightly flat, with no major fireworks," he added.
For the budget day, Patel said, "The Budget will bring significant volatility. The maximum upside is seen at 24,000, while the downside is expected around 22,600."
Bharat Electronic, Cipla, Hero MotoCorp, Power Grid, and Bharti Airtel were the top gainers on the Nifty 50, rising 2-4 percent while Tata Motors, Adani Enterprises, Shriram Finance, Bajaj Finserv, and Adani Ports , falling 1-7 percent.
State-run Nifty 50 constituent Bharat Electronics rose 4% after its December quarter results exceeded expectations, posting year-on-year growth across all parameters. Bharti Airtel gained 2.5% after Airtel Africa, the continent's telecom giant, reported a sharp profit surge of $133 million in Q3 FY25, a turnaround from a $6 million loss a year ago, driven by foreign exchange gains.
Tata Motors sank 6 percent, disappointing the street with weaker-than-expected earnings as sluggish car sales weighed on margins. Adani Enterprises shares fell 3 percent after the company reported a sharp drop in net profit to Rs 58 crore for Q3 FY25, down from Rs 1,888 crore a year ago, weighed down by weakness in its coal trading division. Adani Ports shares fell 2 percent despite a 14 percent rise in consolidated net profit to Rs 2,520 crore in Q3 FY25, as slower cargo volume growth weighed on sentiment.
In a sharp move, Whirlpool of India plunged 20 percent after parent Whirlpool Corp announced plans to cut its stake from 51 percent to 20 percent. Shares of Voltas plummeted 12 percent bogged down by the company's weaker-than-expected earnings performance in the December quarter.
KPI Green shares hit a 5 percent upper circuit at Rs 349.95 after the company announced a contract agreement with Coal India to develop a 300 MWAC grid-connected ground-mounted solar PV plant at GIPCL's Solar Park in Khavda, Gujarat, with five years of O&M services.
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Shares of Laurus Labs jumped 8 percent after the US President Donald Trump-led government approved the decision to resume funding for the US President's Emergency Plan for AIDS Relief (PEPFAR) for the treatment of AIDS.
Shares of ABB India fell 6 percent after parent company ABB Plc reported its quarterly earnings, revealing a 21 percent year-on-year decline in orders from the India region for the quarter ended December.
The broader market pulled back from its highs, with both BSE Midcap index and the BSE Smallcap ending flat.
In the US, markets were mixed after the Fed kept rates unchanged at 4.25-4.5 percent, offering no clear timeline for future cuts. With inflation still stubbornly high, the Fed dropped its previous reference to progress toward its 2 percent target, signalling that price pressures remain elevated.
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