Discover insights on sectoral trends, global cues, and top-performing stocks
The Indian stock market exhibited mixed trends during volatile trading sessions on Tuesday, January 21, 2025. While the benchmark indices showed resilience, sectoral performances and global cues contributed to market sentiment.
Performance of Benchmark Indices
At midday, the BSE Sensex was higher by 76.36 points or 0.10%, standing at 77,149.80. The Nifty 50, however, declined by 48.70 points, or 0.21%, to 23,393.45. These fluctuations highlight the ongoing tug-of-war between market bulls and bears amid global uncertainties and domestic developments.
In the previous session, Indian markets closed on a positive note, with the BSE Sensex gaining 454 points, or 0.59%, to settle at 77,073.44, and the Nifty 50 advancing by 141 points, or 0.61%, to close at 23,344.75.
Movers and Shakers on the BSE Sensex
On the 30-stock BSE Sensex, eight stocks traded lower by noon. Losses were led by Zomato, which plunged 8.01%, followed by Bharti Airtel, NTPC, Kotak Mahindra Bank, and Adani Ports & SEZ. On the gaining side, UltraTech Cement led with a rise of 2.01%, followed by Titan, Nestle India, ITC, and Tata Motors.
Key Gainers and Losers on Nifty 50
The Nifty 50 index saw 35 stocks trading higher, with the top gainer being Apollo Hospital Enterprises, up 2.48%. Other prominent gainers included UltraTech Cement, Wipro, BPCL, and Sun Pharma. On the losing side, Adani Enterprises declined 0.67%, accompanied by Trent, ONGC, Kotak Mahindra Bank, and NTPC.
Sectoral Performance
Sectoral indices showcased a mixed trend. The Nifty Consumer Durables index was the biggest laggard, falling 1.23%, followed by the Realty index at -0.92%, PSU Bank at -0.23%, and the Nifty Bank at -0.05%. Conversely, the Healthcare index emerged as the top performer, rising 1.17%, followed by gains in the Pharma, Media, Auto, IT, FMCG, Metal, and Oil indices.
Broader Market Trends
In the broader market, the Nifty Smallcap 100 gained 0.28%, reflecting positive sentiment among smaller companies. The Nifty Midcap 100 remained flat, indicating subdued activity in midcap stocks. Despite the volatility in benchmark indices, selective buying in these segments indicated cautious optimism.
Global Cues and Influences
Markets in the United States were closed on Monday in observance of Martin Luther King Jr. Day. However, global attention remained on Donald Trump’s inauguration for his second presidential term. His inauguration speech included commitments to energy independence and a more assertive foreign policy but offered limited specifics on trade policies. The absence of aggressive tariff measures provided some relief to global markets, which had been concerned about potential trade wars.
Emerging markets, including India, faced volatility ahead of this political transition. Historical data suggests that both US and Indian equity indices tend to deliver positive 12-month returns following presidential inaugurations, providing a sense of reassurance to investors.
Historical Comparisons and Market Sentiment
Comparisons to 2013 are being drawn, as rising bond yields in the US, domestic inflation concerns, and a slowing earnings cycle echo patterns from that year. Foreign portfolio investors have been net sellers in recent months, mirroring the selloff witnessed during 2013. Additionally, the Indian rupee’s depreciation against major currencies has contributed to market unease.
Despite these challenges, historical data compiled by the BS Research Bureau highlights a 30% average one-year return for the Nifty 50 following previous presidential inauguration days in the US, offering hope for recovery and growth in the near term.
Domestic Developments and Economic News
Indian regulators and government agencies have been actively working on structural reforms. The Reserve Bank of India (RBI) has announced measures to enhance liquidity, including the formation of an advisory committee to evaluate universal and small finance bank applications. Additionally, the third round of the production-linked incentive (PLI) scheme for white goods has seen investment approvals worth Rs 3,516 crore, with significant commitments from manufacturers of AC components and LED lights.
The Securities and Exchange Board of India (Sebi) has also approved six initial public offerings (IPOs), signaling robust activity in the primary markets. The government’s focus on infrastructure and manufacturing continues to drive investment proposals, fostering long-term growth prospects.
Global Market Movements
Asian markets showed a mixed trend on Tuesday. Australia’s S&P/ASX 200 advanced by 0.44%, while Japan’s Nikkei 225 and Topix declined by 0.08% and 0.15%, respectively. South Korea’s Kospi fell 0.32%, and the Kosdaq dropped 0.81%. In contrast, Hong Kong’s Hang Seng remained flat, and mainland China’s CSI 300 index slipped by 0.31%.
In the currency markets, the US dollar index fell 1.2%, marking its sharpest daily decline since late 2023, following a measured stance on tariffs in Trump’s inauguration speech. This dovish tone influenced the outlook for US interest rates, with futures markets now pricing in a higher probability of rate cuts later in the year.
Commodity Market Update
Crude oil prices dipped, with the most actively traded WTI crude March contract falling by $1.02 to $76.37 per barrel in early Asian trading. This decline followed Trump’s announcement of a national emergency to maximize US oil and gas production, raising concerns about potential oversupply.
Gold prices remained steady as investors sought safe-haven assets amid ongoing geopolitical and economic uncertainties.
Outlook and Key Takeaways
Indian equity markets continue to navigate through a period of uncertainty, shaped by global and domestic factors. While challenges such as inflation, foreign outflows, and rupee depreciation persist, historical trends and proactive policy measures provide a foundation for cautious optimism. Investors are closely monitoring developments in the US, particularly around trade and economic policies under Trump’s administration, which are expected to have far-reaching implications for global markets.
As markets adapt to these changing dynamics, a balanced approach to investing in various sectors and asset classes will be critical for sustained growth and stability.
