The headline equity benchmarks pared all losses and traded with modest gains in mid-morning trade. The market is experiencing volatility as foreign institutional investors (FIIs) continue their record outflows, putting pressure on large-cap stocks. Additionally, mixed Q3 results and global cues are contributing to the market's uncertainty. The Nifty traded above the 23,250 mark after hitting the day's low of 23,102.90 in morning trade. IT shares witnessed buying demand for the third consecutive trading session. At 11:30 IST, the barometer index, the S&P BSE Sensex rose 273.11 points or 0.35% to 76,770.08. The Nifty 50 index gained 73.20 points or 0.32% to 23,278.55.
The broader market underperformed the frontline indices. The S&P BSE Mid-Cap index declined 0.59% and the S&P BSE Small-Cap index fell 0.99%.
The market breadth was strong. On the BSE, 1,301 shares rose and 2,360 shares fell. A total of 152 shares were unchanged.
Economy:
The HSBC Flash India Composite Output Index, which measures the month-on-month change in the combined output of India's manufacturing and service sectors, fell from a final reading of 59.2 in December to 57.9 in January. This indicated the weakest rate of expansion in 14 months. However, the headline figure remained well above its long-term average of 54.7.
While the slowdown at the composite level, driven by the service sector, was evident, there was a pickup in growth among goods producers. The HSBC Flash India Manufacturing PMI, a snapshot of factory business conditions based on new orders, output, employment, supplier delivery times, and stocks of purchases, rose from 56.4 in December to 58.0 in January, reflecting the best improvement in the sector's health since July 2024.
Pranjul Bhandari, Chief India Economist at HSBC, said: 'India's manufacturing sector started the year strong, with output and new orders bouncing back from a relatively weak third fiscal quarter. The rise in new export orders was especially noticeable and the easing of input cost inflation is also good news for manufacturers. The cooling in growth in new domestic business in the services sector, however, highlights a potentially emerging weak spot in the economy. New export business for service providers, on the other hand, looks set to maintain its growing momentum.'
IPO Update:
The initial public offer (IPO) of Denta Water and Infra Solutions received bids for 40,39,55,000 shares as against 52,50,000 shares on offer, according to stock exchange data at 11:15 IST on 24 January 2024. The issue was subscribed to 76.94 times.
The issue opened for bidding on 22 January 2024 and it will close on 24 January 2024. The price band of the IPO is fixed between Rs 279 and Rs 294 per share. An investor can bid for a minimum of 50 equity shares and in multiples thereof.
Buzzing Index:
The Nifty IT index gained 0.49% to 43,563.75. The index rallied 4.47% in three consecutive trading sessions.
Persistent Systems (up 1.42%), Wipro (up 0.8%), Infosys (up 0.78%), Tata Consultancy Services (up 0.25%) and Tech Mahindra (up 0.15%) advanced.
On the other hand, Mphasis (down 3.38%), L&T Technology Services (down 0.45%) and Coforge (down 0.36%) edged lower.
Stocks in Spotlight:
Tejas Networks tumbled 8.07%. The company reported a consolidated net profit of Rs 165.57 crore in Q3 FY25 as against net loss of Rs 44.87 crore posted in Q3 FY24. Revenue from operations soared 371.86% to Rs 2642.24 crore in Q3 December 2024 over Q3 December 2023.
HFCL shed 0.54%. The company said that it has successfully secured advance purchase orders (APOs) aggregating to Rs 2,167.65 crore from Rail Vikas Nigam (RVNL).
Thyrocare Technologies added 1.26% after the healthcare service provider reported 28.56% increase in consolidated net profit to Rs 18.95 crore on 23.14% rise in revenue from operations to Rs 165.92 crore in Q3 FY25 over Q3 FY24.
Global Markets:
Asian shares traded mixed on Friday after the Bank of Japan raised its key short-term interest rate to around 0.5%, the highest in 17 years, in an effort to further normalize its monetary policy as inflation remains within target levels.
Inflation in Japan stayed on track in December, supporting the case for the BoJ's expected interest rate hike. Core CPI, excluding volatile fresh food prices, rose 3% year-on-year, as widely expected. Headline CPI hit 3.6% y-o-y'a two-year high'up from 2.9% in November.
On the downside, Japanese manufacturing activity contracted further in January. The au Jibun Bank Manufacturing PMI dropped to 48.8 from December's 49.6, marking the seventh consecutive month of contraction. Any reading below 50 signals a shrinking sector.
Chinese equities climbed after U.S. President Donald Trump suggested he would prefer not to impose further tariffs on China during a media interview, easing trade war tensions.
In the U.S., the S&P 500 closed at a record 6,118.72 points on Thursday, up 0.5%. The Dow Jones Industrial Average gained 0.9% to 44,565.26, while the NASDAQ Composite edged up 0.2%. Investors responded positively to robust corporate earnings and Trump's address at Davos, where he urged for immediate global interest rate cuts.
GE Aerospace shares soared 6.6% after posting better-than-expected Q4 sales and profits. Union Pacific Corporation saw a 5.2% jump in stock price, fueled by strong operational metrics and lower fuel costs. On the flip side, Electronic Arts Inc. tumbled 16.7% after slashing its net bookings guidance, citing weak performance in several games, particularly its soccer franchise. American Airlines Group slid 8.7% as it projected a larger-than-expected Q1 loss due to rising costs, despite exceeding Q4 earnings forecasts.
President Trump, speaking remotely at the World Economic Conference in Davos, Switzerland, addressed global economic issues including interest rates, U.S.-China trade, and energy policies. On monetary policy, he urged for immediate interest rate cuts worldwide, emphasizing their importance for economic growth.
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