With just days to Union Budget 2025, investors brace for major financial sector shifts
On January 30, 2025, the Indian stock market displayed resilience despite mixed global cues and economic uncertainties. The session started on a subdued note but gained momentum as benchmark indices climbed. Investors reacted to corporate earnings, global monetary policies, and macroeconomic developments, shaping the overall market sentiment.
Market Opening and Indices Performance
The trading session began with cautious sentiment, reflecting global concerns over inflation, trade policies, and central bank decisions. However, as the day progressed, buying interest in key stocks helped indices recover.
At the time of writing, the BSE Sensex rose by 134.74 points, or 0.18%, to 76,667.70, while the Nifty50 advanced by 66.60 points, or 0.29%, to 23,229.70. This movement indicated a positive trend, with selective buying in heavyweight stocks despite underlying volatility.
The 30-stock BSE Sensex saw 18 stocks trading higher, while the rest experienced declines. The rally was led by Bajaj Finance, which surged by 3.54%, followed by Bajaj Finserv, NTPC, Maruti Suzuki India, and IndusInd Bank. On the flip side, Tata Motors suffered the biggest decline, losing 7.19%, followed by ITC Hotels, Infosys, ICICI Bank, and Axis Bank.
Similarly, in the Nifty50 index, 28 stocks traded in the green, while 22 declined and one remained unchanged. Bajaj Finance led the gains with an increase of 3.87%, followed by Bajaj Finserv, Hindalco, IndusInd Bank, and ITC Hotels. However, Tata Motors suffered a sharp loss of 7.67%, followed by Wipro, Infosys, ICICI Bank, and UltraTech Cement, which also witnessed declines.
Sectoral Performance and Market Trends
Sectoral movements painted a mixed picture, with some indices showing strength while others struggled. The Nifty Consumer Durables and Nifty Auto indices were among the worst performers, declining by 1.31% and 1.19%, respectively. The Nifty IT index also witnessed a loss of 0.55%, driven by declines in technology stocks. The Nifty Private Bank and Nifty Bank indices dipped 0.10% and 0.08%, respectively, as banking stocks faced profit-booking.
On the positive side, the Nifty Realty index emerged as the top gainer, climbing 1.55%, followed by gains in Oil, Media, Pharma, Healthcare, PSU Bank, FMCG, and Financial Services indices. This indicates that investors found value in real estate, energy, and healthcare stocks, possibly in anticipation of upcoming policy measures in the Union Budget.
Broader Market Performance
In the broader markets, BSE Midcap and Smallcap indices also recorded gains, rising 0.33% and 0.55%, respectively. This suggests that investors continued to show interest in mid-sized and smaller companies, likely expecting stronger growth prospects. However, market volatility remained a concern, as reflected in the India VIX, which climbed 1.48%, signaling increased risk perception among traders.
Global Influences on Market Sentiment
Global market trends played a key role in shaping investor sentiment. The US Federal Reserve decided to hold interest rates steady amid economic uncertainties, leading to cautious optimism in global equity markets. However, the Fed refrained from providing clear guidance on the timing of future rate cuts, which kept investors on edge.
The US trade deficit in goods surged to a record high of $122.1 billion in December, rising 18%. This was driven by a 3.9% increase in imports and a 4.5% decline in exports. The widening deficit raised concerns over economic growth in the US and its potential ripple effects on global markets. Overnight, Wall Street closed lower, with the Dow Jones Industrial Average declining 0.3%, while the S&P 500 and Nasdaq Composite dropped 0.5% each.
In the Asia-Pacific region, Australian equities continued to gain, with the S&P/ASX 200 rising 0.4%. However, markets in Taiwan, South Korea, Hong Kong, and China remained closed due to the Lunar New Year holidays.
European stock markets showed resilience, with shares hitting record highs. Strong earnings reports from leading European technology firms provided a boost, lifting the broader tech sector by 2.4%.
Corporate Earnings and Market Reactions
Corporate earnings continued to influence stock movements. Bajaj Finance posted a 17% year-on-year rise in net profit for the third quarter, reaching ₹3,706 crore, supported by a 25% increase in net interest income. This positive performance helped boost investor confidence in the stock, leading to its strong gains in the session.
Meanwhile, Tata Motors faced a sharp selloff, with its stock declining over 7%. The decline was attributed to weaker-than-expected earnings guidance and concerns over global demand for its vehicle lineup. Additionally, auto sector stocks overall faced pressure due to slowing demand and supply chain challenges.
Primary Market Developments
In the primary markets, the Dr. Agarwal’s Health Care IPO entered its second day of subscription, attracting strong investor interest. The CLN Energy IPO made its debut on the exchanges, while the Malpani Pipes And Fittings IPO continued its subscription process. These listings reflect continued enthusiasm for new public offerings despite broader market uncertainties.
Policy and Regulatory Developments
Regulatory announcements also made headlines. The Securities and Exchange Board of India (SEBI) proposed updates to the investor charter for stockbrokers, aiming to enhance transparency and investor protection. SEBI sought feedback on modifications that would define brokers’ responsibilities, mission statements, and services offered to investors.
Additionally, smallcap mutual funds increased their exposure to microcap stocks, with allocations rising from 22.4% to 31.3% over the past three years. This shift reflects growing confidence in smaller, high-growth potential companies.
Expectations from Union Budget 2025
With just three days remaining until the Union Budget 2025, industry bodies urged the Finance Ministry to extend the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme for Export-Oriented Units (EOUs) and Special Economic Zones (SEZs) until September 30. The move aims to provide parity with export incentives available to other segments of the economy.
Economic and Employment Data
New employment data highlighted ongoing challenges in the unincorporated manufacturing sector. The sector employed 33.7 million workers in 2023-24, lower than the 34.9 million recorded in 2010-11, indicating a decline over the years. The labor ministry announced plans for harmonized labor code implementation across all states and Union Territories by March, with a two-day labor conference scheduled in the national capital.
Global Currency and Commodity Markets
The US dollar strengthened against major currencies as investors weighed Fed policies. The Swiss franc depreciated by 0.35%, while the Japanese yen weakened to 155.25 per dollar. The euro also dipped 0.17% against the dollar.
In commodities, oil prices declined, with Brent crude futures falling by 1.2% to $76.58 per barrel and US crude dropping 1.6% to $72.62. The decline followed higher-than-expected US crude stockpiles, raising concerns about oversupply.
The Indian stock market navigated a mix of global uncertainties, corporate earnings, and sectoral movements on January 30, 2025. While benchmark indices posted modest gains, sectoral divergences and volatility reflected ongoing concerns. As investors brace for the Union Budget 2025, economic policies and fiscal measures will play a crucial role in shaping market direction in the coming days.
