Uncertainty in markets persist; profit growth likely to decline, festive boost falls short

The market is facing renewed uncertainty. Many brokerage firms are suggesting that third-quarter corporate earnings are unlikely to differ significantly from the second quarter, with low profit growth expected. Sales in the automobile sector during the festive period were not much better than before, and the market, which closed with a minor change yesterday, still shows no signs of a strong rally.

US President-elect Donald Trump announced plans to increase tariffs on imports from Canada, Mexico, and China when he assumes office on January 20. While officials expressed relief that India is not included in the list, there is concern that Trump could change his decision. His announcement has led to a rise in the dollar in the currency markets.

The ceasefire between Israel and Hezbollah, which had already been factored into the market, has not affected the current situation.

In the derivatives market, the Gift Nifty closed at 24,255 on Tuesday night but dropped slightly to 24,244 this morning, indicating that the Indian market is likely to open with a small gain today.

Global markets

The US stock market ended the week with modest gains, with the Dow Jones and S&P 500 reaching new records. The release of the Personal Consumption Expenditure Index for October today will influence the Federal Reserve’s interest rate decision in early December. According to the minutes from the Fed’s recent meeting, interest rates are expected to be gradually reduced. Trump's tariff statement has caused some volatility in the markets.

On Tuesday, the Dow Jones index rose by 123.74 points (0.28%) to close at 44,860.31. The S&P 500 gained 34.26 points (0.57%), closing at 6021.63, and the Nasdaq rose by 119.46 points (0.63%) to finish at 19,174.30.

In futures, US indices showed small gains. The Dow rose by 0.08%, and the S&P 500 rose by 0.03%, while the Nasdaq dropped by 0.03%.

The US 10-year Treasury yield fell to 4.304%, suggesting a gradual reduction in interest rates.

European markets closed lower, with most sectors losing ground, as concerns about Trump’s tariff plans weighed on investor sentiment. The auto sector, in particular, suffered.

Asian markets have been mixed today. Japan’s Nikkei index dropped by half a percent, and the Korean market also declined. However, the Australian index gained half a percent.

Indian market

The Indian market opened with a small gain on Tuesday but then dropped sharply. It recovered later, and the major indices ended slightly lower. The mid-cap index lost its gains towards the end of the day, while the small-cap index showed good growth.

Overall, the broader market remained positive. On the BSE, 2,224 stocks advanced, while 1,705 declined. On the NSE, 1,638 stocks rose, and 1,168 fell.

The Nifty closed 27.40 points (0.11%) lower at 24,194.50, and the Sensex fell by 105.79 points (0.13%), finishing at 80,004.06. The Bank Nifty declined by 0.03% (16 points) to 52,191.50. The Midcap index increased by 0.02%, closing at 55,914.40, while the Smallcap index gained 0.82%, ending at 18,265.30.

The automobile, pharma, healthcare, oil and gas sectors saw losses yesterday, while IT, FMCG, media, and metal stocks performed better. The realty sector, which had been rising in the previous days, stagnated in the afternoon and closed flat.

Foreign investors made a net purchase of Rs 1,157.70 crore in the cash market yesterday, while domestic funds and institutions sold shares worth Rs 1,910.86 crore.

Chartists believe the market is not yet ready for a significant rally. They expect the Nifty to continue trading within the 24,000-24,350 range. A breakout above 24,450 could signal a stronger move. Support levels for the Nifty are seen at 24,135 and 24,085, with resistance at 24,305 and 24,360.

Shares of Federal Bank closed with a small gain at Rs 213.50. South Indian Bank rose by 1.40%, CSB Bank by 1.17%, and Dhanlaxmi Bank by 1.63%.

Cochin Shipyard, which had surged by 5% on Monday following a contract award from a US company, rose by another 5% yesterday. Garden Reach Shipbuilders gained 13% over the past two days.

JP Morgan initiated coverage with a "buy" recommendation on defense stocks Bharat Electronics, Hindustan Aeronautics, and Mazagon Dock Shipbuilders, setting a target price with a 16-20% potential gain.

Kitex Garments shares, which announced a bonus issue, also rose by 4.99%, closing at Rs 702.15.

Public sector companies, including those in the railway sector, showed strong performance, with Bharat Electronics and BHEL also rising.

However, shares of the Adani Group fell again. The main reason for the decline is the downgrade of ratings for the group’s companies by three major international rating agencies. Adani Green Energy lost 7.26%, marking a 23% decline over five days. Adani Enterprises fell by 4.02%, and Adani Energy dropped by 3.99%. Adani Ports and Total Gas also saw declines.

Shares of GQG Partners, which had previously invested in Adani Group stocks, fell more than 3% this morning, extending a 16% loss over the past five days.

Gold update

Gold prices have recovered slightly from recent declines, with the precious metal showing some resilience. Trump’s tariff announcement pushed down the dollar, causing gold to rise by 0.33%. Yesterday, gold gained $8.70 per ounce to close at $2,633.00, though it fell slightly this morning to $2,628.

In Kerala, the price of gold fell by Rs 960 per ounce on Tuesday to Rs 56,640.

Silver prices rose to $30.38 per ounce.

The dollar strengthened in the currency markets following Trump’s tariff announcement, with the dollar index closing at 107.01, though it fell to 106.83 this morning. The dollar’s strength put pressure on the rupee, which weakened to Rs 84.34, up four paise from the previous day.

Crude oil prices saw slight declines. Brent crude closed at $72.98 per barrel, down marginally to $72.81 this morning. WTI crude is trading at $68.83, while UAE Murban crude is at $72.28.

Cryptocurrencies continued to struggle, with most falling between four and seven percent. Bitcoin dropped just above $91,000, and Ether fell by 5% to just above $3,300.

Industrial metals showed mixed results. Copper fell by 0.44% to $8,883.96 per tonne, and aluminum dropped 1.49% to $2,612.35 per tonne. However, zinc, tin, and nickel saw gains, with zinc rising by 2.02%, tin by 0.02%, and nickel by 0.52%. Lead, on the other hand, fell by 0.85%.

Market indicators 

- Sensex 30: 80,004.06 (-0.13%)  
- Nifty50: 24,194.50 (-0.11%)  
- Bank Nifty: 52,191.50 (-0.03%)  
- Midcap 100: 55,914.40 (+0.02%)  
- Smallcap 100: 18,265.30 (+0.82%)  
- Dow Jones: 44,860.31 (+0.28%)  
- S&P 500: 6021.63 (+0.57%)  
- Nasdaq: 19,174.30 (+0.63%)  
- Dollar ($): ₹84.33 (+₹0.04)  
- Dollar Index: 106.89 (+0.07)  
- Gold (ounce): $2,633.00 (+$8.70)  
- Gold (pound): ₹56,640 (-₹960)  
- Crude (Brent): $72.98 (-$0.08)