All eyes on major players like JSW Steel, IndiGo, DLF, and Godrej Consumer Products
The Indian stock market witnessed a volatile trading session on Friday, January 24, 2025, as benchmark indices grappled with selling pressure at higher levels. Both the Sensex and Nifty50 saw modest gains, reflecting cautious optimism among investors as earnings season and global factors weighed on market sentiment.
The BSE Sensex closed at 76,600.31, a gain of 79.93 points or 0.10 percent. Similarly, the Nifty50 ended the day at 23,221.40, up by 16.05 points or 0.07 percent. Despite the gains, trading was marked by fluctuations throughout the session as broader market indices displayed a negative trend.
Top Performers and Laggards on the Sensex
The day saw mixed performances across sectors and stocks. On the Sensex, Power Grid, Hindustan Unilever, Infosys, Tata Steel, NTPC, Axis Bank, ICICI Bank, and Nestle India emerged as the top gainers. These companies helped lift the benchmark indices, supported by sectoral resilience in power, FMCG, and IT stocks.
On the other hand, Zomato, IndusInd Bank, Tata Motors, M&M, and Bajaj Finserv ended as the top laggards. The auto sector struggled during the session, reflecting broader concerns over slowing demand and margin pressures in the segment. Financial stocks also faced selling pressure, contributing to the market’s overall subdued mood.
Broader Markets and Sectoral Trends
While benchmark indices managed to stay in positive territory, broader markets painted a contrasting picture. The Nifty SmallCap index declined by 1 percent, while the Nifty MidCap index fell by 0.6 percent. These declines highlight the continued pressure on smaller companies, as investors showed a preference for large-cap stocks amid economic uncertainties.
Among sectoral indices, Nifty Pharma emerged as the worst performer, losing over 1.5 percent. The pharmaceutical sector faced headwinds due to weak demand and concerns over pricing pressure in both domestic and export markets. Other sectors, including realty and metals, also saw declines, dragging down the broader market.
Focus on December Quarter Results
The day’s trading session was heavily influenced by expectations around corporate earnings for the December quarter. Several high-profile companies, including JSW Steel, DLF, IndiGo, and Godrej Consumer Products, were set to announce their financial results, keeping investors on edge. Market participants remained watchful for cues that could provide clarity on industry trends and growth prospects.
JSW Steel, in particular, faced significant scrutiny, with analysts predicting weaker earnings for Q3FY25. Softer steel prices and subdued demand are expected to weigh on the company’s profitability. Meanwhile, DLF’s results are anticipated to reflect the challenges facing the real estate sector, including rising interest rates and muted residential sales in certain markets.
InterGlobe Aviation (IndiGo), the country’s leading low-cost airline, was another key company under the spotlight. Analysts forecast a sequential improvement in performance due to operational efficiencies and stable fuel prices. However, on a year-on-year basis, the airline may see a decline in net profit growth, attributed to a high base effect and potential weakening of passenger load factors.
Global Influences and Macro Trends
Global developments played a significant role in shaping market sentiment on Friday. The Bank of Japan’s decision to raise interest rates by 25 basis points to 0.5 percent garnered attention, marking the policy rate’s highest level since 2008. This move underscored a shift in the central bank’s approach, aligning with global trends of tightening monetary policies.
Additionally, investors kept a close watch on forex data and the preliminary readings of the January Purchasing Managers’ Index (PMI) for both manufacturing and services. These indicators are expected to provide valuable insights into the health of the economy and the trajectory of business activity in the coming months.
Challenges in the Metal and Pharma Sectors
The metal sector faced pressure due to global economic uncertainties and weaker commodity prices. JSW Steel, in particular, saw subdued demand and falling steel prices, affecting its performance ahead of its earnings release. The overall mood in the sector remained cautious as fears of slowing economic growth continued to weigh on investor sentiment.
The pharmaceutical sector also struggled during the session, with the Nifty Pharma index declining over 1.5 percent. Concerns over pricing pressure in export markets and regulatory challenges contributed to the bearish outlook for pharma companies. Torrent Pharma and Suven Pharma, both slated to release their quarterly results, remained under scrutiny.
Realty and Financial Stocks Under Pressure
Realty stocks saw a mixed session, with DLF’s upcoming quarterly results keeping investors on edge. Rising interest rates and slower demand in residential markets posed challenges for the sector, dampening investor sentiment. Financial stocks, including IndusInd Bank and Bajaj Finserv, also faced selling pressure, reflecting concerns over asset quality and potential margin compression.
The weakness in financial and real estate stocks was further exacerbated by cautious global cues, with investors opting to take profits at higher levels.
IT and FMCG Stocks Provide Stability
Amid the broader market volatility, IT and FMCG stocks offered some stability. Infosys and Hindustan Unilever emerged as top gainers on the Sensex, benefiting from positive sentiment around their strong business models and defensive nature. The IT sector, in particular, saw renewed interest due to expectations of steady demand for digital transformation services, especially in key overseas markets.
The FMCG sector remained resilient, with companies like Nestle India and Hindustan Unilever gaining ground. Investors showed confidence in these companies’ ability to navigate inflationary pressures and sustain consumer demand.
Earnings Season and the Road Ahead
The ongoing earnings season will continue to be a key driver of market movements. Friday’s session underscored the cautious approach adopted by investors as they assessed quarterly performances and guidance from top companies. The outcomes of the earnings reports from JSW Steel, IndiGo, and Godrej Consumer Products are likely to set the tone for market sentiment in the coming weeks.
Looking ahead, global cues and domestic macroeconomic indicators will remain critical. The Bank of Japan’s policy shift, coupled with inflation data and corporate earnings, will provide significant direction for markets. Investors will also monitor geopolitical developments and their potential impact on global trade and commodity markets.
Friday’s trading session reflected a mixed picture, with benchmark indices eking out modest gains amid selling pressure at higher levels. Broader markets and several sectors faced challenges, highlighting the cautious mood among investors. As earnings season unfolds, corporate results, along with global and domestic cues, are expected to play a pivotal role in shaping market dynamics. The performance of key sectors such as metals, pharma, and financials will likely remain in focus, as markets navigate through volatility and strive for stability in the weeks ahead.
