Benchmark indices Nifty and Sensex opened on a subdued note, weighed down by a sharp decline in banking and metal stocks that soured market sentiment. Adding to the gloom, all other sectors slipped into the red, reversing the upbeat momentum from the previous session’s strong close. Data from the exchanges shows that Rs 4.5 lakh crore m-cap has been eroded in today's session.
U.S. stock futures climbed in global markets as Donald Trump was sworn in for his second term as U.S. President. Investor optimism surged on expectations that immediate policy actions could bolster the economy, with a particular focus on banking and energy sectors.
Meanwhile, Asian markets traded flat as Trump's comments on imposing 25 percent tariffs on Mexico and Canada by February 1 dampened sentiment. This announcement dashed earlier hopes for a delay in tariff decisions, which had sparked cautious optimism following his inauguration speech.
At about 10:25 am, the Sensex was down 788.54 points or 1.02 percent at 76,284.90, and the Nifty was down 191.45 points or 0.82 percent at 23,153.30. About 1384 shares advanced, 1830 shares declined, and 135 shares unchanged.
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While a gradual 25 percent tariff hike on Canada and Mexico is hinted at, the dollar and US 10-year bond yields dipped slightly. Experts say that delays in tariff hikes could benefit emerging markets like India. However, consistent FII inflows depend on a revival in India’s GDP growth and corporate earnings.
Traders say the markets are currently in an oversold zone, but the uptrend appears to be a temporary bounce rather than a sign of any significant change. Earnings remain mixed, offering no clear direction, while FIIs continue to sell, keeping sentiment subdued. Any meaningful recovery would require decisive cues from sectors rather than individual stocks.
Analysts also say that in the short term, a shift in FII stance or a pre-budget rally driven by short covering could provide a trigger. Banking has shown resilience and could lead the way, but the absence of IT support may limit gains. Key earnings from ICICI Bank and HDFC could also shape market direction. Overall, the market remains challenging and requires cautious navigation.
In the broader market, mid and small-cap mirrored the overall weak trends with losses of 1 percent, each. Ajit Mishra of Religare Broking said that valuations in mid-cap and small-cap stocks remain stretched above long-term averages, suggesting room for further decline. Investors should adopt a stock-specific approach, focusing on strong businesses rather than expecting broad-based participation.
All sectors traded in the red with notable losers being PSU banks and Metal stocks, falling over 1 percent each. Nifty Realty also plunged led by DLF, Oberoi Realty and Pheonix. Nifty Energy, Infra and IT stocks slipped up to a percent. Nifty Pharma and Auto, up in the morning, also erased gains to trade lower by 0.5 and 0.8 percent, respectively.
Food delivery major Zomato shares were making headlines following a sharp fall of nearly 9 percent. This comes after it reported a 57 percent year-on-year (YoY) decline in quarterly profit after tax at Rs 59 crore in the third quarter. Zomato’s revenue from operations rose 64 percent YoY to Rs 5,404 crore in Q3, up from Rs 3,288 crore a year ago. It had reported a revenue of Rs 4,799 crore in the previous quarter.
Dixon Tech shares crashed 8 percent as Jefferies dished out an 'underperform' rating. This comes despite reporting a huge jump in its consolidated net profit at Rs 216 crore in the December 2024 quarter. Brokerages It had reported a net profit of Rs 97 crore during the same period of last fiscal, the company said in an exchange filing. The company's topline also doubled to Rs 10,553.7 crore in the current fiscal of the December quarter.
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Paytm shares also slipped 4 percent after its December quarter net loss narrowed to Rs 208 crore from Rs 220 crore in the year-ago period. This comes after the firm turned black in the September quarter (Q2FY25) with a profit of Rs 930 crore on the back of gains made via the sale of ticketing business to Zomato. However, without the exceptional gain, it continued to be in loss.
"After a positive opening, Nifty can find support at 23,250 followed by 23,100 and 23,000. On the higher side, 23,400 can be immediate resistance, followed by 23,500 and 23,700," Hardik Matalia, Derivative Analyst at Choice Broking said. "The charts of Bank Nifty indicate that it may get support at 49,200 followed by 48,800 and 48,500. If the index advances further, 49,700 would be the initial key resistance, followed by 50,000 and 50,300," he added.
Apollo Hospital, Tata Motors, Tata Consumer Products, BPCL, and UltraTech Cement were the top gainers on the Nifty. Adani Enterprises, Kotak Mahindra Bank, Reliance Industries, Trent and Adani Ports were the major laggards on the index.
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