The domestic equity indices traded with small gains in the morning trade, supported by positive global cues. Notably, the closure of Hindenburg Research and favorable developments in the Israel-Hamas ceasefire contributed to the market's upward movement. The Nifty traded above the 23,250 mark. PSU bank shares extended gains for the three consecutive trading sessions. Trading could be volatile due to the weekly F&O series expiry today. At 11:30 IST, the barometer index, the S&P BSE Sensex, added 218.80 points or 0.29% to 76,949.10. The Nifty 50 index rose 75.55 points or 0.33% to 23,288.75.
The broader market outperformed the headline indices. The S&P BSE Mid-Cap index added 1.12% and the S&P BSE Small-Cap index rallied 1.51%.
The market breadth was strong. On the BSE, 2,837 shares rose and 925 shares fell. A total of 139 shares were unchanged.
Economy:
India's trade deficit widened to $21.94 billion in December from $18.76 billion a year ago as merchandise exports contracted for the second month in a row, data released Wednesday showed. Exports contracted by about 1% year-on-year to $ 38.01 billion due to global uncertainties, while imports rose by about 5% to $ 59.95 billion. Gold imports in December amounted to $4.7 billion. However, the merchandise trade deficit narrowed in December compared with November. The government had revised November's gold imports to $9.84 billion from $14.86 billion announced earlier. The correction had lowered the November trade deficit to $32.8 billion from a record $37.8 billion estimated earlier.
IPO Update:
The initial public offer of Stallion India Fluorochemicals received bids for 1,55,12,978 shares as against 2,81,41,905 shares on offer, according to stock exchange data at 11:15 IST on 16 January 2025. The issue was subscribed 1.81 times.
The issue opened for bidding on 16 January 2025, and it will close on 20 January 2025. The price band of the IPO is fixed between Rs 85 and Rs 95 per share. An investor can bid for a minimum of 165 equity shares and in multiples thereof.
Buzzing Index:
The Nifty PSU Bank index added 3.02% to 6,336.65. The index rallied 7.45% in three consecutive trading sessions.
Punjab & Sind Bank (up 8.58%), Union Bank of India (up 4.97%), Indian Bank (up 4.96%), Bank of India (up 3.81%), Punjab National Bank (up 3.56%), Bank of Baroda (up 3.49%), Canara Bank (up 3.14%), Bank of Maharashtra (up 3.12%), Central Bank of India (up 3.12%) and UCO Bank (up 3.09%) advanced.
Stocks in Spotlight:
Mahindra EPC Irrigation hit an upper circuit of 20% after the company's consolidated net profit climbed 280.6% to Rs 6.35 crore in Q3 FY25 as against Rs 1.67 crore posted in Q3 FY24. Revenue from operations rose by 1.4% year on year to Rs 81.45 crore in the quarter ended 31 December 2024.
HDFC Life Insurance Company soared 11.11% after its standalone net profit increased 13.66% to Rs 414.94 crore on 10.08% rise in net premium income to Rs 16,771.26 crore in Q3 FY25 over Q3 FY24.
L&T Technology Services (LTTS) jumped 6.92% after its consolidated net profit increased marginally to Rs 322.4 crore in Q3 FY25 as against Rs 319.6 crore in Q2 FY25. Revenue from operations was at Rs 2,653 crore in the December 2024 quarter, up 3.11% as against Rs 2,572.9 crore reported in the preceding quarter of the same year.
Global Markets:
Asian shares advanced on Thursday, mirroring Wall Street's gains, as a softer-than-expected US core inflation report revived hopes for Federal Reserve interest rate cuts later this year.
South Korea's central bank unexpectedly left its policy interest rate unchanged on Thursday, weighing the impact of its back-to-back rate cuts last year while supporting the won which weakened to a 15-year low versus the U.S. dollar in recent weeks.
The Bank of Korea held its benchmark interest rate at 3.00% at its monetary policy review, an outcome expected by only seven of 34 economists polled by Reuters. The remaining 27 had expected the bank to cut the rate by 25 basis points.
In its statement, the BOK said that while inflation had stabilized and household debt had slowed down, 'downside risks to economic growth have intensified and the volatility of exchange rates has increased due to the unexpected political risks that have recently escalated. The bank also said that uncertainty has also increased due to 'changing domestic political situation and economic policies in major countries.'
The US core consumer price index (CPI), which excludes volatile food and energy prices, increased by 0.2% in December, marking the first slowdown in six months. This eased concerns about inflation and bolstered expectations that the Fed might begin cutting rates sooner than previously anticipated. Swap traders are now fully pricing in a rate cut by July, a significant shift from the expectations of a September or October cut following Friday's strong jobs report.
The year-over-year increase in core CPI was 3.2%, still above the Fed's 2% target. However, the deceleration in the monthly rate provided confidence that inflation is gradually cooling down.
Wall Street experienced a sharp rally on Wednesday, fueled by a combination of positive bank earnings and the encouraging inflation data. The S&P 500 surged 1.8%, the NASDAQ Composite climbed 2.5%, and the Dow Jones Industrial Average jumped 1.7%.
JPMorgan Chase, Wells Fargo, Goldman Sachs, and Citigroup, among other major banks, reported strong fourth-quarter earnings, setting a positive tone for the upcoming earnings season. Asset manager BlackRock also delivered robust results.
In other news, shares of Brazilian airline Azul SA soared over 4% after announcing a non-binding agreement to explore a merger with rival Gol, a move that would create Brazil's largest airline operator.
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