The market's decline has deepened. With eight consecutive days of losses and all indices down more than 10 percent, there is growing speculation about a potential relief rally. However, technical indicators suggest further declines.
Foreign investors are beginning to sell off, and hopes that Donald Trump will take reassuring actions regarding tariffs on India are fading. This, along with other factors, is sending a negative signal to the market. The only comforting aspect is the drop in crude oil prices.
In the derivatives market, the GIFT Nifty closed at 22,949, down from 23,965 this morning. This indicates that the Indian market is likely to open with a slight loss today.
European markets ended in losses on Friday but managed to achieve gains for the eighth consecutive week, thanks to Trump's efforts in Ukraine, which have provided hope for the market.
The fact that US President Donald Trump's alternative tariff removal won't be implemented immediately, and that several countries are now engaging in discussions with the US on tariffs, has offered some comfort. Additionally, weekend inflation figures weren't as negative as initially anticipated, though retail sales fell more than expected.
US stock indexes experienced daily declines on Friday, but all three indexes still posted weekly gains.
The Dow Jones Industrial Average dropped 165.35 points (0.37%) to 44,546.10.
The S&P 500 index fell by 0.44 points (0.01%) to 6,114.63.
The Nasdaq Composite Index rose 81.19 points (0.41%) to 20,026.80.
Futures were up by 0.02 percent, with the Dow Jones Industrial Average rising 0.04 percent and the S&P 500 up 0.08 percent.
Most Asian markets were higher in the morning, although Japan's Nikkei fell by half a percent. Japan’s GDP grew by 2.8 percent in Q4, exceeding expectations of a 1 percent rise. However, growth in 2024 is forecasted to slow to just 0.1 percent.
The Indian market, battered by Trump’s tariff threats and foreign investors pulling out, ended in losses for the eighth consecutive day. The Nifty50 index closed below 23,000 and the Sensex below 76,000. The Nifty dropped by 2.68 percent last week.
On Friday, the Nifty closed 102.15 points (0.44%) lower at 22,929.25, and the Sensex closed 199.76 points (0.26%) lower at 75,939.21. The Bank Nifty finished 260.40 points (0.53%) lower at 49,099.45. The midcap index dropped 2.41 percent (1,227.05 points) to 49,654.15, while the smallcap index fell 3.55 percent (566.65 points) to 15,407.20.
Foreign investors sold a net amount of Rs 4,294.69 crore in the cash market on Friday. Domestic funds and financial institutions purchased a net amount of Rs 4,363.87 crore. So far this month, foreign investors have sold shares worth Rs 29,183.43 crore, with Rs 87,374.66 crore worth of shares sold in January.
The broader market remains bearish, with 629 stocks rising and 3,386 falling on the BSE. On the NSE, 453 stocks rose, and 2,412 stocks fell.
If the Nifty weakens today, the support zone could shift to 22,750-22,600. If it rises, the key resistance levels will be at 23,250. Nifty might find support at 22,800 and 22,725 today, with 23,100 and 23,185 acting as hurdles.
BHEL secured a letter of interest for the construction of the Singareni thermal power plant in Telangana, valued at Rs 6,700 crore.
Aditya Birla Fashions reported a 3.3 percent increase in revenue for Q3, though its net loss narrowed to Rs 51.3 crore. Operating profit rose 14.8 percent.
Utkarsh Small Finance Bank posted a loss of Rs 168 crore in Q3, as bad loans doubled.
Glenmark Pharma saw a 35.1 percent rise in revenue for Q3 and turned a profit of Rs 348 crore, compared to a loss of Rs 470 crore.
Narayana Hrudayalaya increased its turnover by 13.5 percent, but net profit only grew by 2.6 percent.
Dileep Buildcon reported a 10 percent decline in revenue for Q3, though profit rose by 7.3 percent.
Many analysts believe that the market is nearing the end of its decline, though some predict the Nifty could fall another 1,000 points from its current level. The small-cap index is down by 20 percent, entering the correction zone, while the mid-cap index is not far behind. Both the Nifty and the Sensex are down more than 10 percent, with company earnings and Trump's trade war significantly influencing the market.
The growth forecast for companies in Q4 doesn't inspire much confidence. For the first three quarters of FY2024-25, companies reported a turnover growth of only 7.2 percent, slightly up from 6.8 percent last year. Net profit growth has slowed to 4.9 percent, compared to 27.4 percent in the previous financial year. If Q4 results are disappointing and there is no improvement in growth rates for the next fiscal year, company profit growth could stagnate.
The exact impact of the ongoing US trade war remains uncertain. As India exports and imports different items compared to the US, there is hope that the country will not face severe setbacks. However, reducing tariffs on items such as two-wheelers and bourbon whiskey may not be enough to soften the US's position. The US is seeking low tariffs on dairy products, meat, fruits, and electronics, but the big question remains: will India agree to these terms, or what will happen if it doesn't? If discounts are granted, Indian industries and agriculture could suffer significant harm.
Gold saw a drop on Friday after profit-taking, though it ended with a strong weekly gain. The price rose to $2,936 and fell to $2,875, closing at $2,883.10 per ounce, marking a decline of more than 1.5 percent. Gold prices rose to $2,897 this morning and are expected to continue an upward trend.
In Kerala, the price of gold rose by Rs 80 per ounce to Rs 63,920 on Friday, before dropping by Rs 800 to Rs 63,120 on Saturday.
Silver stood at $32.19 per ounce.
The dollar started the week at a record low of Rs 87.92 against the rupee but fell to Rs 86.45 in subsequent days, closing at Rs 86.82 on Friday. The rupee is expected to fluctuate within a narrow range this week, supported by the Reserve Bank's dollar sales. Exporters are reluctant to sell dollars.
The dollar index dropped to 106.71 on Friday, before falling slightly to 106.65 this morning.
US bond prices rose again, which led to a drop in investment yields. The yield on 10-year bonds fell from 4.53 to 4.478 percent.
The possibility of an end to the Ukraine war has led to a fall in crude oil prices. Russia-Ukraine talks are scheduled to begin in Saudi Arabia, with US mediation, though no date has been confirmed.
Brent crude closed at $74.74, down by $0.55, and was priced at $74.66 this morning. WTI was at $70.58, while UAE Murban crude dropped to $77.06.
Cryptocurrencies experienced more volatility. Bitcoin briefly rose above $97,000 on Friday before falling below $96,200 over the weekend. Ether dropped to $2,660.
Industrial metals saw gains on Friday, driven by a delay in tariffs and a decline in the dollar index. Copper surged 3.99 percent to $9,811.15 per tonne, while aluminum rose 1.40 percent to $2,640.13. Lead increased by 0.08 percent, tin by 2.40 percent, nickel by 1.72 percent, and zinc by 1.58 percent.
Sensex 30: 75,939.21 (-0.26%)
Nifty50: 22,929.25 (-0.44%)
Bank Nifty: 49,099.45 (-0.53%)
Midcap 100: 49,654.15 (-2.41%)
Smallcap 100: 15,407.20 (-3.55%)
Dow Jones: 44,546.10 (-0.37%)
S&P: 6,114.63 (-0.01%)
Nasdaq: 20,026.80 (+0.41%)
Dollar (₹): ₹86.82 (-₹0.08)
Dollar Index: 106.71 (-0.60)
Gold (ounce): $2,883.10 (-$45.60)
Gold (pound):
Friday: ₹63,920 (+₹80)
Saturday: ₹63,120 (-₹800)
Crude (Brent) Oil: $74.74 (-$0.55)
