Closing Bell: Nifty at 23,600, Sensex down 213 points; all eyes on RBI policy

Indian equity indices ended on a negative note with Nifty at 23,600 on February 6. At close, the Sensex was down 213.12 points or 0.27 percent at 78,058.16, and the Nifty was down 92.95 points or 0.39 percent at 23,603.35.

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.

Today, the benchmark indices witnessed intraday profit booking at higher levels. The Nifty ends 93 points lower and the Sensex down by 213 points. Among sectors, selective Pharma stocks registered buying interest at lower levels, while the Real Estate and Capital Market indices shed over 2 percent. Technically, after a muted open, the market faced consistent selling pressure at higher levels. On the daily charts, it has formed a bearish candle near the 50-day SMA (Simple Moving Average), which supports further weakness from the current levels. However, the short-term texture of the market is still on the positive side.

We are of the view that if the market manages to trade above 23,500/77800, it could bounce back to 23,750-23,800/78500-78600. On the flip side, trading below 23,500/77800 would make the uptrend vulnerable. Below this level, traders may prefer to exit from their long positions.

Despite logging sharp gains in the first few minutes of opening trades, markets slipped into the red and moved in a narrow range with a negative bias for most part of the trading session. Investors booked profits in rate-sensitives like realty, banking, and auto shares ahead of tomorrow's monetary policy announcement. If there is any surprise rate cut, we may see short-term optimism.

Once again, 50DMA proved to be a reliable resistance level. After a strong opening, the Index failed to maintain higher levels, gradually losing ground throughout the day, ultimately closing at 23,603.35 with a loss of 92.95 points. Among the sectors, Pharma and IT stood out as the top performers, while Realty and FMCG faced the steepest declines. A noticeable divergence emerged in the broader market, with the Midcap correcting over 1%, while the Smallcap more or less mirrored the movement of Nifty50.

On the daily chart, Nifty50 formed a bearish candlestick pattern. However, the downside appears to be supported at the 23,520 level, while a break above 23,800 would be necessary to confirm the continuation of the uptrend.

Indian rupee ended at fresh record low at 87.57 per dollar on Thursday versus Wednesday's close of 87.46.

Indian equity indices ended on a negative note with Nifty at 23,600 on February 6.

At close, the Sensex was down 213.12 points or 0.27 percent at 78,058.16, and the Nifty was down 92.95 points or 0.39 percent at 23,603.35. About 1871 shares advanced, 1907 shares declined, and 124 shares unchanged.

Among sectors, except Pharma, IT, Private Bank all other sectoral indices ended in the red with auto, FMCG, realty, Consumer Durables fell between 1-2 percent, while metal, PSU Bank, energy, media, oil & gas down 0.4-0.8 percent.

Nifty Midcap index fell 1.2 percent and smallcap index was down 0.3 percent.

Trent, Bharat Electronics, Bharti Airtel, Titan Company, NTPC were among the top losers on the Nifty, while gainers were Cipla, Adani Ports, Infosys, Dr Reddy's Labs, Tata Consumer.

#1 Land Rover US retail sales grew 70 percent YoY (-10 percent mmm) in Jan-25

#2 This compares to +34 percent & +58 percent YoY in Dec-24 & Nov-24, respectively

#3 Land Rover incentives grew 73 percent YoY(-13 percent MoM, broadly in-line with seasonality)

#4 Mix of high margin models at 78 percent remained unchanged vs the December quarter

#5 Jaguar (In Phase-Out Stage) sales fell 14 percent YoY to 750 units

#6 JLR, in its Q3 conference call highlighted that US sales remain strong, sees challenges in China

Indian Rupee plunged to fresh record lows today on weak US Dollar and a recovery in the US Dollar index. Rising odds of a rate cut by the Reserve Bank of India in its monetary policy meeting on Friday also pressurised the Rupee. However, a weak tone in crude oil prices cushioned the downside.

We expect Rupee to trade with negative bias amid weak domestic markets and importer demand for Dollars. Risk aversion in global markets amid ongoing uncertainty over US trade tariffs may further pressurise the Rupee. However, any intervention by the RBI may support the Rupee at lower levels. Traders may take cues from weekly unemployment claims data from the US. Investors may remain cautious ahead of the RBI’s monetary policy meeting decision and US non-farm payrolls data tomorrow. USDINR spot price is expected to trade in a range of Rs 87.30 to Rs 87.90.

#1 Missed estimate of volume growth & margins as it navigates through headwinds

#2 High export freight costs (for tiles, affecting demand) & European winter impacted company

#3 Sales to tile manufacturers declined 1 percent YoY with overall volumes growing at a sluggish 3 percent

#4 Largely helped by sale to vehicles, which were up 12 percent, in-line with key peers

#5 Margin, as expected, declined & were relatively low; should deflate further in March quarter

#6 Lower LNG prices & restructuring keep us overweight on 1-year view

RBI is expected to cut the repo rate by 25 basis points to 6.25% from the current rate of 6.50% in the Monetary policy meeting on February 7. The last rate cut was in May 2020 of 40 basis points to revive the economic growth affected by the pandemic. The cut in the repo rate means that the RBI will lend the money to the banks at a lower rate which in turn provides a benefit to the banks to charge lower interest rates from borrowers. This increases the money supply in the economy, strengthens liquidity, encourages borrowing, and boosts consumer demand.

The main reason why RBI will likely cut the key rate this time is the expectation of an easing of CPI to 4.5% - 4.7% in January 2025 from 5.2% in December 2024. For FY25, the real GDP growth is estimated at 6.4% which is the lowest growth rate in the last four years. Also, the GDP is expected to grow between 6.3% to 6.8% in FY26. To accelerate the GDP growth, there is an anticipation that the RBI will take the rate-cut route.

The increase in tax rebate to Rs12 lakhs in the Union Budget for increasing the disposable income of the middle-class population and the RBI’s recent liquidity measures of OMO and VRR auctions, show a commitment that India is looking to enhance liquidity, rejuvenate sluggish demand, and foster economic growth. However, the falling rupee is a key trigger that could influence the RBI's decision as further cuts can put pressure on the Indian rupee and increase outflows from the country. Globally, the tariff tensions and the strengthening dollar index can also affect RBI's monetary policy outcome on Friday.--

#1 Compelling valuation with strong outlook on growth

#2 Stock has gone from trading at a 15 percent premium to NAV (consensus) to a 20 percent discount

#3 Its presales (TTM) continued to grow

#4 Expect DLF’s growth momentum to continue

#5 See adequate new launches over the next 8-9 quarters

#6 There is unsold inventory, strong business moats

#7 Strong rentals, healthy cashflow & balancesheet offer downside cushion

The Sensex was down 295.51 points or 0.38 percent at 77,975.77, and the Nifty was down 108.65 points or 0.46 percent at 23,587.65. About 1671 shares advanced, 1825 shares declined, and 98 shares unchanged.

#1 A game of two halves – foods delivery excites, quick commerce biz in the waiting

#2 Food delivery growth ahead of Zomato, gaining further market share

#3 FD EBITDA expanded an impressive 90 Bps led by lower delivery cost/higher take rates

#4 Quick commerce was impacted by hyper competitive environment

#5 QC GOV driven by average order value, however margin was impacted

#1 Hyper-competitive environment could continue in near term for QC biz

#2 Could bring much higher cash burn for competition vs Zomato

#1 EBITDA Rs 144 crore vs Rs130 crore YoY

#2 Revenue at Rs1253 crore vs Rs1166 crore YoY

#1 Net profit at Rs12 cr vs Rs10 cr (YoY)

#2 Revenue up 14% at Rs756.5 cr vs Rs665.5 cr (YoY)

#3 EBITDA up 10% at Rs134.2 cr vs Rs122 cr (YoY)

#4 Margin at 17.7% vs 18.3% (YoY)

#1  Gross NPA 2.07% vs Bloomberg estimates 2.05%

#2 Provisions Rs911 crore, down 80% QoQ

#3 Loan loss provision Rs2310 crore, down 36% YoY

#1 Net profit down 30.2% at Rs6 cr vs Rs8.6 cr (YoY)

#2 Revenue up 5.2% at Rs319 cr vs Rs303.3 cr (YoY)

#4 EBITDA at Rs7.7 cr vs Rs3.4 cr (YoY)

#5 Margin at 2.4% vs 1.1% (YoY)

#1 Demand remained subdued

#2 Upturn in October from festivities was not sustained in Nov & Dec

#3 Premium products across categories performed better

#4 Growth rate has been better in Tier 3 & 4 towns vs tier 1 & 2 towns

#5 Price mix: 2 percent vs 4 percent in Q2, owing to a difference in category mix

#6 Management reiterated 19-21 percent margin band for FY25

#7 Management expects some increase in it costs in the upcoming quarter

#8 In Q4, demand remains subdued as per management

#1 In-line Q3 topline, beat on margins

#2 Company announced retirement of Mr Anuj Jain (MD for last three years) after 35 years of service

#1 Q3FY25 was weak; volume & revenue were flat YoY, while EBITDA declined by 10 percent

#2 Management remains upbeat about improvement in growth prospects in both domestic & export markets

#3 Retain hold as earnings downgrade cycle continues

#1 Q3 was a steady quarter led by healthy performance in both mature and new hospitals

#2 Believe growth is more back-end loaded as major bed addition would come from H2FY26

We do not anticipate the RBI cutting rates in the upcoming policy meeting. While inflation is showing signs of easing and domestic growth requires support, global conditions remain unfavourable for a rate cut at this stage. With China imposing retaliatory tariffs on the US, the RBI is likely to adopt a wait-and-watch approach regarding further developments in the trade war. Shipping costs are already elevated, and an immediate rate cut could widen the interest rate differential between the US and India, exerting additional pressure on the INR, which has already seen significant depreciation. The inflationary impact of this depreciation is yet to fully materialize. Moreover, the US Federal Reserve is unlikely to cut rates before April/May 2025.

The case for supporting growth will only gain traction once INR stability is ensured. Having said that, on the growth front, the RBI has already provided liquidity support through a CRR cut and OMOs, while the recent Union Budget introduced measures to boost consumption.

In the first policy meeting under the new Governor, we expect the RBI to continue addressing the liquidity deficit through additional measures. We see a possibility of a shift in policy stance from the current ‘neutral’ position to ‘accommodative’. This will offer enough reason for the Indian stock market to rejoice.

Revenue rose 34.3% at Rs 4,656.6 crore Vs Rs 3,466.6 crore, YoY

Britannia Industries, State Bank Of India, Hero MotoCorp, ITC, Aurobindo Pharma, Bharti Airtel, Aadhar Housing Finance, Allcargo Gati, Akums Drugs and Pharmaceuticals, Ansal Properties & Infrastructure, Apollo Tyres, Agro Tech Foods, Bafna Pharmaceuticals, Bajel Projects, Bharti Hexacom, Bikaji Foods International, Chambal Fertilisers & Chemicals, Cochin Shipyard, DCX Systems, Dhampur Sugar Mills, Finolex Industries, GMM Pfaudler, Gulf Oil Lubricants India, JK Lakshmi Cement, Krishna Institute of Medical Sciences, KRBL, Morepen Laboratories, Motherson Sumi Wiring India, Muthoot Microfin, NCC, NMDC, NOCIL, Paramount Communications, PG Electroplast, PI Industries, Prism Johnson, PVR Inox, The Ramco Cements, Rane Holdings, Reliance Communications, REC, Rupa & Company, Sobha, Somany Ceramics, Sonata Software, Surya Roshni, TD Power Systems, Trent, Viceroy Hotels, Walchandnagar Industries, Zee Learn, Zuari Agro Chemicals

Broking house lower FY25E-27E core EPS estimates by 2-3% as its adjust the margin estimates.

The stock trades at 22.6x FY26E and 25.2x FY27E core P/E.

Unexpected competition or regulatory setbacks in key products and approval delays in future products in the US are downside risks.

At the upcoming Monetary Policy Committee (MPC) meeting, led by Governor Malhotra, the Reserve Bank of India (RBI) is widely expected to cut the repo rate by 25 basis points. However, this decision remains finely balanced. The central bank may instead prioritize liquidity measures and defer the rate cut to the April policy review, particularly in light of mounting global uncertainties.

There are several compelling arguments in favor of a rate cut. Sluggish economic growth, the government’s advance estimates, and recent efforts to boost banking system liquidity create a strong case. Just last week, the RBI announced plans to inject ₹1.5 lakh crore into the banking system, following a December infusion of ₹1.16 lakh crore through a 50 basis point reduction in the cash reserve ratio.

Nonetheless, challenges persist. Inflation remains above the RBI’s medium-term target of 4%, and increasing global trade-related uncertainties have added complexity to the economic outlook. The government’s fiscal prudence, reflected in the recently announced Union Budget, points toward a downward trajectory for interest rates. While the broader direction seems clear, the precise timing of the next rate cut remains uncertain.

Net sales stood at Rs 1,973.08 crore in December 2024, up 38.06% YoY

Revenue from operations rose 28% YoY to Rs 1,074 crore

#1 Net profit up 12.8 percent at Rs 115 crore vs Rs 102 crore, YoY

#2 Revenue down 7.3 percent at Rs 1,264.8 crore vs Rs 1,364.5 crore, YoY

#1 Net profit down 12.4 percent at Rs 44.7 crore vs Rs 51 crore, YoY

#2 Revenue down 16.1 percent at Rs 117 crore vs Rs 139.5 crore, YoY

#1 Food delivery shows way & quick commerce crossing a bump in road

#2 Quick commerce GOV beats estimate; contribution margin disappoints

#3 Food delivery growth driven by bolt; margin beats expectations

#4 Dark store & city expansion continues

#1 Net profit flat at Rs 221 crore, YoY

#2 Revenue up 5.7 percent at Rs 4,152.9 crore vs Rs 3,939 crore, YoY

Vimta Labs share price extend gains on second day.

#1 Net profit up 82.8 percent at Rs 5.3 crore vs Rs 2.9 crore, YoY

#2 Revenue down 4.2 percent at Rs 196 crore vs 204.8 crore, YoY

The company will consider and approve an interim dividend on equity shares for FY25-26 on February 13.

Britannia Industries, State Bank Of India, Hero MotoCorp, ITC, Aurobindo Pharma, Bharti Airtel, Aadhar Housing Finance, Allcargo Gati, Akums Drugs and Pharmaceuticals, Ansal Properties & Infrastructure, Apollo Tyres, Agro Tech Foods, Bafna Pharmaceuticals, Bajel Projects, Bharat Dynamics, BEML, Bharti Hexacom, Bikaji Foods International, Chambal Fertilisers & Chemicals, Cochin Shipyard, DCX Systems, Dhampur Sugar Mills, Finolex Industries, GMM Pfaudler, Gulf Oil Lubricants India, JK Lakshmi Cement, Krishna Institute of Medical Sciences, KRBL, Morepen Laboratories, MRF, Motherson Sumi Wiring India, Muthoot Microfin, NCC, NMDC, NOCIL, Paramount Communications, PG Electroplast, PI Industries, Prism Johnson, PVR Inox, The Ramco Cements, Rane Holdings, Reliance Communications, REC, Rupa & Company, Sobha, Somany Ceramics, Sonata Software, Surya Roshni, TD Power Systems, Trent, Viceroy Hotels, Walchandnagar Industries, Zee Learn, Zuari Agro Chemicals

#1 Net profit flat at Rs 63 crore, YoY

#2 Revenue up 14.1 percent at Rs 758.4 crore vs Rs 664.5 crore, YoY

#1 Net profit at Rs 674.7 crore vs Rs 297.9 crore, YoY

#2 Revenue down 23.9 percent at Rs 3,613.5 crore vs Rs 4,749.7 crore, YoY

#1 Net profit up 15.8 percent at Rs 403 crore vs Rs 347.9 crore, YoY

#2 Revenue up 13.7 percent at Rs 26,716 crore vs Rs 23,505 crore, YoY