Despite buoyant sentiment in Western and Asian markets triggered by positive trade developments, the Indian stock market remained indifferent, gripped instead by escalating concerns of a full-blown war following intensified border clashes.
In the derivatives segment, Gift Nifty closed at 23,885 on Wednesday night. On Thursday morning, it opened slightly lower at 23,835, surged to 24,025, but later fell back to 23,970. This trend hinted at a weak opening for Indian equities.
European markets ended in positive territory on the previous day. However, the FTSE 100 in the UK declined by 0.32%, partly due to the Bank of England cutting interest rates by 25 basis points. The US markets, which initially surged more than 1.5% in early trade following the UK-US trade agreement, gave up a significant portion of their gains by closing time. Under the new agreement, import tariffs would be slashed to 10%, down from 25%, for goods like steel, aluminium, and vehicles.
On Thursday, the Dow Jones Industrial Average closed 254.48 points (0.62%) higher at 41,368.45. The S&P 500 gained 32.66 points (0.58%) to end at 5,663.94, while the Nasdaq surged by 189.98 points (1.07%) to 17,928.14. However, US futures opened lower on Friday morning, with the Dow down 0.26%, the S&P 500 down 0.20%, and Nasdaq down 0.17%.
Across Asia, markets showed gains. Japan's Nikkei index rose 1.3%, and the Hong Kong market also opened in the green. However, the Shanghai Composite began the day on a weaker note.
Back in India, the mood was sombre. The intensification of the border conflict pushed the markets into a late-session selloff on Thursday, dragging the Nifty down to an intraday low of 24,150 before it closed at 24,273, down nearly half a per cent. Broader indices were hit harder, with midcap and smallcap indices dropping close to 2%.
The situation remained tense going into Friday’s session, although some market watchers believed precautions may prevent a dramatic crash. In Pakistan, investor panic continued to deepen. The Karachi Stock Exchange's KSE 100 index closed down 5.9% on Thursday. Over two days, the market plunged 9%. Meanwhile, the IMF began a crucial meeting to consider a financial aid package for Pakistan, which India reportedly opposes.
On the Indian bourses, Thursday’s session ended with the Nifty down 140.60 points (0.58%) at 24,273.80, while the Sensex fell 411.97 points (0.51%) to 80,334.81. The Bank Nifty declined by 245.25 points (0.45%) to close at 54,365.65. The Nifty Midcap 100 tumbled by 1,058.45 points (1.95%) to 53,229.30, and the Nifty Smallcap 100 dropped by 234.20 points (1.43%) to settle at 16,183.75.
Market breadth showed a clear tilt towards decliners. On the BSE, only 1,335 stocks advanced while 2,570 declined. On the NSE, 820 stocks rose while 2,027 fell. As many as 26 stocks hit 52-week highs, matched by 52 stocks touching 52-week lows. Meanwhile, 73 stocks hit upper circuits and 61 hit lower circuits.
Foreign institutional investors (FIIs) continued to buy, making net purchases of ₹2,007.96 crore in the cash segment. Domestic institutional investors (DIIs), however, sold shares worth ₹596.25 crore.
Technically, the Nifty breached its 24,200 support level before bouncing back slightly by close. If it fails to hold above this mark again, it could slide to 23,850. On Friday, supports are expected at 24,170 and 23,990, while resistances are likely near 24,400 and 24,590.
On the corporate front, Larsen & Toubro reported an 11% rise in revenue and a 25% jump in net profit for the fourth quarter. The company has guided for 15% revenue growth and 8.5% profit margins for the current year.
Britannia’s revenue rose by 8.9%, though net profit only inched up by 4.2%. Titan reported a 19.7% jump in sales, a 29.7% rise in operating profit, and a margin expansion to 10.7%, with net profit also growing 10.7%.
Union Bank’s net interest income grew by 0.8%, but net profit jumped a solid 50.6%, supported by improved asset quality and provisioning metrics. Biocon’s revenue grew 12.8%, while net profit surged a whopping 154.2%.
Major fourth-quarter results are expected today from Dr. Reddy’s Laboratories, Manappuram Finance, Swiggy, ABB India, Bank of India, Birla Corporation, Cera Sanitaryware, Cholamandalam Finance, GE Shipping, Navin Fluorine, and Thermax, among others.
Gold prices continued their slide under the pressure of a stronger dollar and the US-UK trade deal. Gold dropped 2% on Thursday to close at $3,306 per ounce. On Friday morning, it briefly rebounded to $3,324 before falling again to $3,288.
In Kerala, gold rose by ₹440 per sovereign on Thursday to ₹73,040, but is expected to drop today. Silver declined to $32.25 per ounce. Copper ended 0.77% lower at $9,412 per tonne. Aluminium, however, climbed 1.14% to $2,412.80 per tonne. Other industrial metals moved in mixed directions, with tin up 1.26%, lead up 0.63%, nickel up 0.13%, while zinc fell 0.83%.
Rubber prices remained unchanged in the international market at $1.7230 per kg. Cocoa dropped by 0.77% to $9,129.29, while coffee prices dipped 0.37%. Palm oil prices rose by 0.89%.
The dollar index breached the 100 mark, rising over 1% to close at 100.64 on Thursday, and hovered around 100.74 on Friday morning. The euro weakened to $1.1205, while the pound fell to $1.322. The Japanese yen slipped to 146.11 per dollar.
Following the Federal Reserve’s latest decision, US bond yields moved higher, with the 10-year yield climbing to 4.37%. The Indian rupee took a severe hit, falling 88 paise (1.5%) to close at 85.71 against the dollar on Thursday — the sharpest drop in recent times. The rupee’s fall was more due to geopolitical tensions with Pakistan than global dollar strength. It is expected to remain under pressure today. Meanwhile, the Chinese yuan stayed flat at 7.23 per dollar.
Crude oil prices rallied on hopes that US-China talks could signal the end of the ongoing trade war. Brent crude rose 3% on Thursday to $62.84 per barrel, while WTI touched $60.13. On Friday morning, Brent was trading at $63.07, WTI at $60.17, and Murban crude at $63.57.
Cryptocurrencies rallied strongly amid optimism that the trade war might be nearing resolution. Bitcoin jumped 7% to cross $103,000, while Ethereum surged 22% to top $2,180. Several other altcoins also posted double-digit gains.
