Closing Bell: Market in free fall; Sensex dives 1,258 points, Nifty below 23,650; all sectors in the red

Indian equity indices ended lower on the second consecutive session on January 6 with Nifty below 23,650. At close, the Sensex was down 1,258.12 points or 1.59 percent at 77,964.99, and the Nifty was down 388.70 points or 1.62 percent at 23,616.05.

We wrap up today's edition of the Moneycontrol live market blog, and will be back tomorrow morning with all the latest updates and alerts. Please visit https://www.moneycontrol.com/markets/global-indices for all the global market action.

Nifty opened mildly in the green however witnessed follow through selling pressure and closed down ~389 points. On the daily charts we can observe that the Nifty could not hold on to the 200 day exponential moving average (23700) and has again closed below that. Inability to hold and sustain above it indicates signs of weakness. We expect the Nifty to consolidate within a range 23500 – 24200 from short term perspective. Daily momentum indicator has a positive crossover however price is not showing corresponding strength and hence we shall assign more weightage to the price action and trade accordingly.

The market opened lower due to renewed fears over the new virus, which triggered a decline in the Index. The selling pressure intensified during the second half of the session, resulting in a sharp drop of 388.70 points to conclude the session at 23,616.05. All sectors closed in the red, with PSU Banks and Energy stocks showing the largest losses. The broader market was hit particularly hard, as Mid and Small-cap stocks fell significantly, underperforming the Frontline Index.

The daily chart shows a strong bearish candlestick, indicating the Index is likely heading towards testing its previous support zone of 23,260-23,460. On the upside, resistance is seen at 23,900.

Emerging markets are undergoing consolidation due to uncertainties surrounding new US economic policies, the Fed's hawkish stance on future rate cuts, potential upward revision for CY25 inflation, and a strong dollar, all of which are negatively impacting market sentiment. The primary catalyst for a sharp sell-off in the domestic market appears to be concerns over the human metapneumovirus (HMPV).

Additionally, the initial Q3 consensus earnings estimate suggests a potential gradual recovery in domestic corporate earnings, which could explain the domestic market's underperformance compared to global markets led by premium valuation.

There are already concerns that the forthcoming third quarter earnings could be muted for several sectors due to weak government spending and subdued demand, which is pushing investors, especially the FIIs, to further slash their domestic equity bets. Also, the focus will be on next month's Union Budget announcement and what will be the government's action plan to boost demand and measures to overcome global challenges.

Indian rupee ended 4 paise lower at 85.82 per dollar on Monday versus Friday's close of 85.78.

Indian equity indices ended lower on the second consecutive session on January 6 with Nifty below 23,650.

At close, the Sensex was down 1,258.12 points or 1.59 percent at 77,964.99, and the Nifty was down 388.70 points or 1.62 percent at 23,616.05. About 629 shares advanced, 3329 shares declined, and 109 shares unchanged.

Biggest Nifty losers included Tata Steel, Trent, Coal India, NTPC and BPCL, while gainers were Apollo Hospitals, Tata Consumer, Titan Company, HCL Technologies.

All the sectoral indices ended in the red with PSU Bank down 4 percent, while metal, realty, energy, PSU, power and oil & gas down 3 percent each.

BSE Midcap index fell 2.4 percent and Smallcap index down 3 percent.

#1 Peak of cyclical headwinds from palm oil & adverse seasonality likely behind post Q3

#2 Expect recovery starting Q4 out of sharp spike in palm oil prices which hurt soap margin & volumes

#3 Adverse seasonality in home insecticides category led to a volume decline

#4 Company putting out a profit warning for Q3 was a negative surprise

#5 Poised to return to being fastest growing FMCG co in FY26

#1 Reckon credit cost peaked in Q2FY25 & would remain stable in Q3FY25E

#2 Credit Cost shall start improving in Q4FY25

#3 Expect company’s credit cost trajectory to improve because its weak credit cycle set in earlier than peers

#4 Potential rate cuts by the RBI over coming quarters shall be an added positive

#1 COO/CTO resignation adds to recent top management churn

#2 Continue to monitor changes in top management, especially in light of the recent churn

#3 Any impact of the recent management exit on medium-term growth outlook will be key to watch

#4 Build in 16 percent loan CAGR & 15 percent deposit CAGR over FY24-27

#1 Pre-Q3 shows soft CASA & deposits; steady loan growth

#2 Deposit growth was relatively softer QoQ at 2.3 percent

#3 CASA deposit mobilisation was weak

Indian Rupee touched a fresh record low today amid weak tone in the domestic markets and persistent FII outflows. Elevated crude oil prices and worries over HMPV virus scare also weighed on the Rupee.

10-year US bond yields also rose. However, a weak US Dollar cushioned the downside.

We expect Rupee to trade with a negative bias on weak tone in the markets amid the virus scare and continued selling by foreign investors. However, a soft US Dollar and any further intervention by the RBI may support Rupee at lower levels. Traders may take cues from services PMI and factory orders data from the US. USDINR spot price is expected to trade in a range of Rs 85.65 to Rs 86.10.

#1 Observing few major concerns going away in near-term, especially on asset quality side

#2 Share of metro region in credit card debt has been gradually rising since FY23

#3 Share of top 8 metro cities in new sourcing has been rising

#4 Company has seen a rise in net card addition in Nov’24, which is highest since Dec’23

#5 Asset quality issues should stabilise in next few quarters

#6 Expect credit cost to be 9.1 percent in FY25 before falling to 7.5 percent/7 percent in FY26/27

#7 Company likely to be biggest beneficiary of any potential policy rate cut in FY26

#1 For Q3, company posted a moderation in loan growth

#2 Deposits were led mostly by a 31 percent rise in bulk deposits

#3 LDR growth could be a near-term drag on loan growth

#4 Company is better placed than peers to handle the MFI pain

#5 Improvement in broader MFI market should underpin rerating

The Sensex was down 1,209.55 points or 1.53 percent at 78,013.56, and the Nifty was down 372.65 points or 1.55 percent at 23,632.10. About 530 shares advanced, 3047 shares declined, and 82 shares unchanged.

#1 High edible oil prices due to customs duty hike led to some down-trading among consumers

#2 Market share remained stable due to presence of brands at multiple price points

#3 Revenue growth for foods & FMCG stood at 22 percent, moderating from 37 percent in H1FY25

#1 Absolute AUM accretion at a consolidated level saw a strong uptick

#2 Q3 Is seasonally stronger for BAF; overall new loans booked were up 22 percent YoY

#3 Customer addition saw highest quarterly increase

Shareholders have approved the sub-division of the existing one equity share of the company (with a face value of Rs 10 each) into two equity shares (with a face value of Rs 5 each).

The company will collaborate with Qualcomm to develop a virtual electronic control unit (ECU) platform for automakers and Tier-1 suppliers, using Snapdragon virtual system-on-chips (VSoCs) for the next generation of mobility solutions for passenger, commercial, and off-highway vehicle segments.

Sudhakar Rao Annam has resigned as Chief Financial Officer of the company, effective January 4. However, the Board has appointed Srirama Raju Kapalli as the new Chief Financial Officer.

#1 Pre-Q3 update shows soft loans and CASA; steady deposit growth

#2 Reported soft growth in its gross AUM

#3 Deposit growth was healthy driven by growth in term deposits

#4 CASA deposits declined & growth was soft

Operations of the manufacturing plant at Rajahmundry have been disrupted due to a strike by workers called by the Workers Trade Unions, effective January 3. The company management is in discussion with the concerned trade unions to resolve the issue amicably as soon as possible.

Trade unions are demanding a higher revision in wages in the forthcoming wage settlement with the management. The loss of production per day due to the strike is approximately 510 MT.

The company has reported a fire accident on January 4 in the factory at Peddakandukur, Telangana. The fire has resulted in damage to buildings and equipment in one of the pyrotechnic manufacturing facilities.

The incident has led to the loss of life of one person and severe injuries to another, who has been shifted to a hospital in Hyderabad for treatment. The damaged assets were fully insured.

#1 After notable underperformance in 2024, stock has fallen to a conservative value

#2 See fall in stock as entry point to position for attractive gains as triggers play out later in 2025

#3 Persisting weakness in retail profitability has been a big drag for stock

#4 Expect retail segment to get back to promising growth in H2FY25

#5 Ramp-up in airfiber subscribers for Jio should drive potential of Jio IPO in late 2025

#6 Full effect of tariff hikes plus another tariff hike should drive excitement for Jio IPO in late 2025

#7 Anticipate start of new energy projects including integrated solar PV manufacturing in 2025

#1 For Q3FY25, loan growth slowed softer than expectation due to pullback in a strong quarter

#2 AUM growth is better & retail loan rose, deposit grew by 16 percent

#3 LDR fell to 99 percent YoY Vs target range of 90 percent

#4 Valuations do factor in softer growth; NIM will be key to watch

#1 Upgrade after recent stock underperformance

#2 Execution and its stated strategy staying on track

#3 Expect company to gradually tide over leadership transition challenge

#4 Pricing actions across seven cities were relatively sparse in Q3 by online & offline players

#5 Tata 1 mg has increased prices in Mumbai & Delhi by 20 percent

#6 Expect volume growth to pick up steadily in suburban & tier-3/4 towns

#1 Consolidated net revenue growth likely to be higher than mid-twenties

#2 Gross merchandise value (GMV) growth for beauty vertical expected to be low thirties

#3 eB2B distribution business – Superstore by Nykaa continues to witness rapid expansion, servicing around 2.6 lakh transacting retailers in 1,100+ cities

#4 Fashion vertical is expected to deliver net revenue growth of around 20 percent

#5 Online fashion demand continues to be subdued, but company remains optimistic about long-term growth opportunity

#1 Decline in MFI disbursements to hurt margin

#2 MFI disbursements to remain subdued near term

#3 Stock has de-rated 25 percent in past six months

#4 Believe stock would re-rate as MFI stress peaks & credit cost begins to decline in H1FY26

The company has received a Letter of Intent (LOI) from Gujarat Urja Vikas Nigam for setting up a 250 MW/500 MWh standalone battery energy storage system in Gujarat.

The company, through its subsidiary Ananthay Properties, has signed a definitive agreement for a land parcel worth Rs 630 crore in Bengaluru for developing a residential project spanning about 20 acres.

The project will have a total saleable area of 2.5 million square feet, with a gross development value (GDV) of about Rs 2,700 crore.

The company has received a Letter of Award from Oil and Natural Gas Corporation for the charter hiring of one 100MT workover rig for seven years for the Assam asset. The total estimated value of the said award is Rs 90.70 crore.

#1 Q3 update shows in-line asset quality; soft on disbursements

#2 Downside risks to AUM growth are there

#3 Disbursements came in a tad below estimates

#4 Company likely have a strong Q4, helped by PCR rundown

#5 See downside risks to FY26 PpOP & weak RoA driving

#1 Q3 update was sequentially better; still low-single digit revenue growth

#2 Consolidated EBITDA to see flat growth, slightly below estimate

#3 Management expects sequential improvement in demand in coming quarters

#4 Focus remains on driving market share gains, brand building, profitable growth

Milind Nagnur has resigned as Chief Operating Officer and Chief Technology Officer of the bank, effective February 15, 2025.

Additionally, the Reserve Bank of India has given its approval to HDFC Bank and its group entities to acquire up to 9.50% of the share capital in Kotak Mahindra Bank. The said approval is valid for a period of one year from the date of RBI’s letter, i.e., until January 2, 2026.

#1 Gross advances grow 3 percent to Rs 25,425 billion Vs Rs 24,693 billion, YoY

#2 Deposits soar 15.8 percent to Rs 25,635 billion Vs Rs 22,140 billion, YoY

#3 CASA deposits increase 4.4 percent to Rs 8,725 billion Vs 8,356 billion, YoY

#4 Time deposits rise 22.7 percent to Rs 16,910 billion Vs Rs 13,783 billion, YoY

#5 Assets under management jump 7.6 percent to Rs 26,276 billion Vs Rs 24,414 billion, YoY

The Reserve Bank of India has given its approval to HDFC Bank and its group entities to acquire up to 9.50% of the paid-up share capital in AU Small Finance Bank within one year from the date of the RBI approval letter.

Most awaited ITC demerger gets price discovery at Rs~ 455.60 and ~Rs 27 adjusted towards ITC HOTEL based on previous closing during the Special Pre-Open Session. Discovery price of ITC Hotel was in line with our expectations. Now ITC shareholders get 1 share of ITC Hotels for every 10 held of ITC. As per the index demerger listing rules ITC Hotels will be part of index and will be excluded from indices 3 business days after its listing date (if there are no circuit breakers).

We are expecting the listing to be on or before Feb 2025 and based on the peer valuation expectation in the luxury hotel space, we are expecting the listing to be anywhere in the range of Rs ~100-125 per shares on conservative basis. ITC Hotels' demerger is expected to unlock substantial shareholder value and enable the newly formed company to focus on growth in the luxury hospitality sector.

Post demerger we continue to remain optimistic on the stocks and the demerger entity (ITC HOTEL). hence we recommend investors to hold and enjoy the unlocking shareholders value.

The Reserve Bank of India has granted its approval to HDFC Bank and its group entities to acquire up to 9.50% of the paid-up share capital of Capital Small Finance Bank. This approval is valid for one year from the date of the said letter.

The Sensex was down 1,153.27 points or 1.46 percent at 78,069.84, and the Nifty was down 361.90 points or 1.51 percent at 23,642.85. About 573 shares advanced, 2935 shares declined, and 100 shares unchanged.

Happy Forgings' board of directors approved a capital investment of up to Rs 650 crores to establish advanced forging capabilities to serve the non-automotive industrial segment.

The company’s subsidiary, NTPC Renewable Energy, has emerged as a successful bidder in the e-reverse auction conducted by Uttar Pradesh Power Corporation (UPPCL). NTPC Renewable Energy secured a capacity of 1,000 MW at a tariff of Rs 2.56 per kWh.

Additionally, NTPC UP Green Energy has been incorporated as a 51:49 joint venture of NTPC Green Energy and Uttar Pradesh Rajya Vidyut Utpadan Nigam.

The bank has received an order from the Maharashtra Goods and Services Tax (GST) Department, raising a GST demand and penalty of Rs 100.76 crore. The bank will take appropriate steps, including contesting the order through an appeal within the prescribed timelines.

#1 Total business grows 7.26 percent to Rs 26,443 crore Vs Rs 24,654 crore

#2 Total deposit rises 5.07 percent to Rs 15,067 crore Vs Rs 14,340 crore

#3 CASA increases 3.18 percent to Rs 4,602 crore Vs Rs 4,460 crore

#4 Gross advance soars 10.3 percent to Rs 11,376 crore Vs Rs 10,314 crore

#5 Gold loan grows 32.82 percent to Rs 3,553 crore Vs Rs 2,675 crore