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Indian equity markets ended the trading session in the red on Friday, as investor sentiment remained subdued despite the Reserve Bank of India’s (RBI) first repo rate cut since May 2020. The benchmark indices, Sensex and Nifty, closed 0.25% and 0.18% lower, respectively, weighed down by profit-booking in banking, FMCG, and oil & gas stocks .
Key Highlights of Today’s Session
- Indices Performance
- Sensex: Fell 197.97 points (0.25%) to close at 77,860.19.
- Nifty 50: Declined 43.40 points (0.18%) to settle at 23,559.95 .
- India VIX: Dropped 3.45% to 13.69, signaling reduced near-term volatility .
- RBI Monetary Policy Impact
The central bank cut the repo rate by 25 basis points to 6.25% but maintained a neutral stance. While aimed at stimulating credit growth and economic activity, the move failed to lift market sentiment due to concerns over slowing GDP growth (revised to 6.4% for FY25) and persistent foreign institutional investor (FII) outflows . - Sectoral Movements
- Top Gainers: Metals and telecom sectors led the rally, with Tata Steel (+4.34%), Bharti Airtel (+3.60%), and Zomato (+2.10%) emerging as star performers .
- Top Losers: FMCG and banking stocks dragged indices lower. ITC (-2.38%), SBI (-2.03%), and Adani Ports (-1.44%) were among the worst hit .
- FII/DII Activity
- FIIs: Continued their selling spree, offloading ₹470.39 crore worth of equities. This marked their 22nd day of net selling in January 2025, with cumulative outflows exceeding ₹1.7 trillion since October 2024 .
- DIIs: Provided counterbalance, injecting ₹454.20 crore into the market .
- Deratives Market Trends
- FIIs increased short positions in index futures, particularly in Bank Nifty and Nifty contracts.
- MANAPPURAM entered the securities ban list due to exceeding derivative position limits .
Expert Insights
- Palka Arora Chopra (Master Capital Services): Highlighted the RBI’s cautious stance, emphasizing the need to monitor rupee depreciation and global trade tensions despite rate cuts .
- Sundeep Mohindru (M1xchange): Noted the rate cut’s potential to boost MSME credit access, aligning with the Union Budget’s focus on growth through deregulation .
- Yashwant Lodha (PayNearby): Praised RBI’s digital security measures, calling them critical for sustaining India’s digital payment ecosystem .
Post-Budget Sectoral Impact
While the Union Budget 2025 (presented on February 1) initially buoyed sectors like auto and agriculture, its ripple effects were mixed today:
- Auto: Maruti Suzuki extended gains, rising 615 points post-Budget, though profit-booking trimmed advances .
- Agriculture: Stocks like Kaveri Seed Co (+13.49% on Budget day) stabilized, reflecting optimism around the PM Dhan-Dhaanya Krishi Yojana .
- Cement: UltraTech and Ambuja Cements faced pressure due to modest infrastructure spending hikes .
Market Outlook
The RBI’s downward revision of FY25 GDP growth and persistent FII selling underscore near-term headwinds. However, analysts remain cautiously optimistic, citing improved liquidity and the Budget’s focus on private investment. The Nifty’s support is seen at 23,400, with resistance at 23,700 .
Stay tuned for further updates as global cues and corporate earnings shape the trajectory of Indian markets.
