The key equity indices traded with significant losses in the early afternoon trade, following weak cues from Asian markets. This decline was driven by heightened concerns over a potential broader trade war, particularly after US President Donald Trump imposed tariffs on Canada, Mexico, and China. The Nifty hovered below the 23,300 level. PSU bank shares extended losses for the second consecutive trading sessions.
At 12:28 IST, the barometer index, the S&P BSE Sensex, tumbled 502.02 points or 0.66% to 76,999.45. The Nifty 50 index declined 191.80 points or 0.82% to 23,286.10.
The broader market underperformed the frontline indices. The S&P BSE Mid-Cap index declined 1.31% and the S&P BSE Small-Cap index lost 1.83%.
The market breadth was weak. On the BSE, 2,778 shares rose and 1,078 shares fell. A total of 166 shares were unchanged.
Economy:
India's forex reserves increased $5.574 billion to $629.557 billion in the week ended January 24, the Reserve Bank of India said on Friday (January 31). In the previous reporting week, the overall kitty had dropped $1.888 billion to $623.983 billion.
For the week ended January 24, foreign currency assets, a major component of the reserves, increased from $4.758 billion to $537.891 billion, as per the RBI data.
Gold reserves increased $704 million to $69.651 billion during the week. The Special Drawing Rights (SDRs) were up $79 million to $17.861 billion, the apex bank said.
India's reserve position with the IMF was up $33 million to $4.154 billion in the reporting week, the apex bank data showed.
Meanwhile, the budget announcement of zero tax for earnings up to Rs 12 lakh per annum and the rejig of tax slabs across the board should prompt more than 90% of individual taxpayers to embrace the new tax regime as compared to the about 75% as of now, CBDT Chairman Ravi Agrawal said on Sunday.
Agrawal said the government's and the Income-Tax Department's philosophy and approach is to ensure a non-intrusive tax administration in the country through an enhanced usage of artificial intelligence (AI) apart from the regular human intelligence gathering mechanism. The CBDT chief said the tax processes available to a common taxpayer for reporting their income were not very complex, giving examples of the simplified ITR-1, pre-filled income tax returns, automatic computation of tax deducted at source (TDS), etc. available to them.
Derivatives:
The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, added 2.35% to 14.43. The Nifty 27 February 2025 futures were trading at 23,376.90, at a premium of 90.8 points as compared with the spot at 23,286.10.
The Nifty option chain for the 29 February 2024 expiry showed maximum Call OI of 190.8 lakh contracts at the 24,000 strike price. Maximum put OI of 101.90 lakh contracts were seen at 23,300 strike price.
Buzzing Index:
The Nifty PSU Bank index declined 1.86% to 6100.95. The index shed 3.42% in past two trading sessions.
Indian Bank (down 4%), Bank of India (down 3.07%), Union Bank of India (down 2.58%), Canara Bank (down 2.31%), Indian Overseas Bank (down 2.31%), UCO Bank (down 2.26%), Punjab & Sind Bank (down 2.15%), Bank of Maharashtra (down 1.74%), Punjab National Bank (down 1.3%) and State Bank of India (down 1.27%) declined.
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