The domestic equity benchmarks closed modestly lower on Monday, mirroring weak global sentiment driven by escalating trade war concerns. The downturn was largely attributed to recent tariff impositions by the United States on Canada, Mexico, and China, raising anxieties about a wider trade conflict. The long-term consequences of these tariffs remain uncertain, with the existing trade imbalances and tariff-driven dynamics creating market instability. The Nifty index closed below the 23,400 mark. Energy, metals, and FMCG shares were the primary decliners, while IT, consumer durables, and healthcare stocks managed to resist the downward trend. With the 2025 budget now concluded, market attention shifts to the Reserve Bank of India's monetary policy announcement scheduled for February 7.
The S&P BSE Sensex, declined 319.22 points or 0.41% to 77,186.74. The Nifty 50 index lost 121.10 points or 0.52% to 23,361.05.
Larsen & Toubro (down 4.64%), ITC (down 1.8%), Reliance Industries (down 1.54%) and HDFC Bank (down 0.57%) were major drags.
The broader market underperformed the frontline indices. The S&P BSE Mid-Cap index declined 0.89% and the S&P BSE Small-Cap index fell 1.77%.
The market breadth was weak. On the BSE, 1139 shares rose and 2877 shares fell. A total of 168 shares were unchanged.
The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, added 1.82% to 14.35.
The Indian rupee hit a record low against the US dollar on Monday. The currency opened at 87 and slipped further to 87.29 against the greenback in early trades. It was currently trading at 87.165.
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.
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.
The government has announced a Rs 47,000 crore disinvestment target for the fiscal year 2026, according to budget documents. However, the government has revised its disinvestment estimate for the current fiscal year (FY25) downward. Revised estimates now project proceeds of Rs 33,000 crore, lower than the initial budget estimate of Rs 50,000 crore. The government anticipates increased revenue from public sector dividends. Projections for FY26 indicate dividends of Rs 69,000 crore, exceeding both the FY25 budget estimate of Rs 56,260 crore and the revised estimate of Rs 55,000 crore. The projected FY26 figure also surpasses the Rs 65,381.65 crore collected in FY24.
Finance Minister Nirmala Sitharaman unveiled a Rs 11.21 lakh crore capital expenditure (capex) target for the fiscal year 2026 during her budget presentation on Saturday. While the FY25 budget allocated Rs 11.1 lakh crore for capex, revised estimates project spending of only Rs 10.18 lakh crore, a shortfall of approximately Rs 93,000 crore. The revised estimate for the FY25 fiscal deficit stands at 4.8% of GDP. Sitharaman explained that the shortfall stemmed from the general election cycle, which effectively paused project implementation for two to three months.
Despite the current year's dip, the FY26 capex target represents a 10% increase compared to the budgeted figure for FY25. When including government grants to states, the total projected capex expenditure for FY26 rises to Rs 15.5 lakh crore.
Numbers to Track:
The yield on India's 10-year benchmark federal paper was up 1.36% to 6.781 as compared with previous close 6.690.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 87.1600, compared with its close of 86.6200 during the previous trading session.
MCX Gold futures for 4 April 2025 settlement rose 0.57% to Rs 82,777.
The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.07% to 109.44.
The United States 10-year bond yield shed 0.59% to 4.536.
In the commodities market, Brent crude for April 2025 settlement added 73 cents, or 0.96% to $76.40 a barrel.
Global Markets:
The US Dow Jones index futures were currently down by 552 points, signaling a potential weak opening for US equities in the upcoming trading session.
European and Asian markets tumbled on Monday as US President Donald Trump's tariffs on Canada, Mexico, and China triggered fears of a broad trade war and hit global growth.
Meanwhile, China's Caixin manufacturing PMI grew 50.1 in January, below the prior month's reading of 50.5.
The Trump administration announced new tariffs on imports from Mexico, Canada, and China, starting Saturday. These tariffs are partly in response to illegal fentanyl distribution. Potential tariffs include 25% on Mexican and Canadian imports, 10% on Chinese goods, and future tariffs on chips, oil, gas (possibly by February 18th), steel, aluminum, and copper. Trump insists these tariffs are unavoidable and will generate substantial revenue, even hinting at possible European tariffs. He contrasted the US's historical reliance on tariffs with its current dependence on income tax. All three countries decried the tariffs and vowed retaliation.
The news caused US stock market declines on Friday. At the close in NYSE, the Dow Jones Industrial Average fell 0.75%, while the S&P 500 index declined 0.5%, and the NASDAQ Composite index declined 0.28%.
Apple shares closed lower as the broader market selloff erased earlier gains. The company expects sales growth in the low- to mid-single digits for its fiscal second quarter, easing concerns about flagship handset sales, which slightly missed estimates in the holiday season. CEO Tim Cook remains optimistic, citing Apple Intelligence (AI features) as a driver of future sales.
Exxon Mobil stock fell 2.5%, despite exceeding fourth-quarter profit expectations. Higher oil and gas production helped offset lower crude prices and weaker refining margins.
Auto Sales Impact:
Eicher Motors added 1.53% after the company's VE Commercial Vehicles (VECV) reported a 20.14% year on year growth in commercial vehicle (CV) sales to 8,489 units in January 2025.
Hero MotoCorp declined 2.65%. The company reported a 2.14% increase in total sales, reaching 442,873 units in January 2025, compared to 433,598 units in January 2024.
Bajaj Auto fell 2.61%. The two-wheeler major reported a 7% increase in total auto sales to 3,81,040 units in January 2025 as against 3,56,010 units in January 2024.
Atul Auto added 1.66%. The company has reported an 8.68% rise in total auto sales to 2,772 units in January 2025 from 2,313 units in January 2024.
Stocks in Spotlight:
Jyoti Structures soared 10% after the company's consolidated net profit soared to Rs 11.48 crore in Q3 FY25 as compared with Rs 1.08 crore in Q3 FY24. Revenue from operations surged 146.15% to Rs 137.35 crore in Q3 FY25 as compared with Rs 55.80 crore posted in the same quarter last year.
Kamat Hotels (India) hit an upper limit of 20% after the company's net profit soared 215.7% to Rs 26.2 crore in Q3 FY25 as against Rs 8.3 crore in Q2 FY25. Operational income spiked 29.9% to Rs 110.9 crore in Q3 FY25 over Q2 FY25.
Neogen Chemicals rallied 6.12% after the company's consolidated net profit stood at Rs 10.01 crore in Q3 FY25, steeply higher than Rs 1.06 crore in Q3 FY24. Revenue from operations jumped 22.49% YoY to Rs 201.43 crore during the quarter.
Aarti Industries declined 1.28% after the company reported a 62.9% decline in consolidated net profit to Rs 46 crore in Q3 FY25 as against Rs 124 crore posted in a similar quarter last year. However, revenue from operations (gross) increased 7.73% year on year (YoY) to Rs 2,035 crore in the third quarter of FY25.
Divi's Laboratories jumped 4.75% after the pharma major's consolidated net profit surged 64.53% to Rs 589 crore on 25.01% rise in revenue from operations to Rs 2,319 crore in Q3 FY25 over Q3 FY24.
Anant Raj declined 7.51%. The real estate developer has reported a 53.58% jump in consolidated net profit to Rs 110.32 crore in Q3 FY25 from Rs 71.83 crore in Q3 FY24. Revenue from operations jumped 36.29% to Rs 534.64 crore in the third quarter of FY25, compared with Rs 392.27 crore posted in the same period last year.
Alembic Pharmaceuticals declined 1.38% after the company's consolidated net profit tumbled 23.29% to Rs 138.42 crore in Q3 FY25, compared with Rs 180.45 crore posted in Q3 FY24. Revenue from operations was at Rs 1,692.74 crore in the third quarter of FY25, up 3.81% year on year (YoY).
Man Infraconstruction slipped 3.95% after the company reported a 2.87% decline in consolidated net profit to Rs 84.03 crore in Q3 FY25 as against Rs 86.51 crore in Q3 FY24. Revenue from operations increased marginally to Rs 242.33 crore in the quarter ended 31 December 2024, compared to Rs 241.76 crore posted in the same quarter last year.
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