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The domestic stock market witnessed significant losses on Monday, influenced by stronger-than-expected U.S. labor data causing a reassessment of expectations for early interest rate cuts. The Nifty50 settled below the 21,550 mark, reversing from the day's high of 21,763.95 in early trade. Both the BSE Sensex and NSE Nifty50 closed down by up to 1%, leading to profit-booking in broader markets. Despite these losses, the market's undertone remains robust with no prolonged negative closures recorded. Realty, media, and auto shares showed resilience, while PSU banks, FMCG, and metal shares slumped.
Traders are eyeing key support for Nifty50 at 21,300, citing upcoming triggers such as inflation data, bank loan growth, and the Q3 earnings season commencing on 11 January 2023. However, concerns persist regarding domestic profit-booking and global apprehensions over delayed rate cuts, potentially dampening the market rally.
The barometer index, the S&P BSE Sensex, was down 670.93 points or 0.93% to 71,355.22. The Nifty 50 index declined 197.80 points or 0.91% to 21,513.
ICICI Bank (down 1.22%), HDFC Bank (down 1.11%) and Reliance Industries (down 0.79%) dragged the indices.
In the broader market, the S&P BSE Mid-Cap index down 0.87% and the S&P BSE Small-Cap index shed 0.36%.
The market breadth was negative. On the BSE, 1,855 shares rose and 2,123 shares fell. A total of 96 shares were unchanged.
The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, jumped 7.06% to 13.52.
Economy:
India?s foreign exchange reserves rose for a seventh straight week and stood at a near 22-month high of $623.20 billion as of December 29, according to the latest RBI data. The reserves rose by $2.76 billion for the reported week after increasing by a total of $30.12 billion in the prior six weeks.
Gold reserves were up by $853 million to $48.328 billion during the week, the RBI said. The Special Drawing Rights (SDRs) were up by $38 million to $18.365 billion, the apex bank said.
India?s reserve position with the IMF was down by $2 million to $4.892 billion in the reporting week.
Numbers to Track:
The yield on India's 10-year benchmark federal paper shed 0.40% to 7.206 as compared with previous close 7.235.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 83.1400, compared with 83.1500 its close of during the previous trading session.
MCX Gold futures for 5 February 2024 settlement declined 0.65% to Rs 62,150.
The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.06% to 102.47.
The United States 10-year bond yield slipped 0.12% to 4.032.
In the commodities market, Brent crude for March 2024 settlement loss $1.71 or 2.17% to $77.05 a barrel.
Global Markets:
The US Dow Jones index futures were down 188 points, indicating a weak opening in the US stock market. Traders reduced their expectations of a Fed rate cut in March, influenced by the stronger-than-expected nonfarm payrolls data, indicating a resilient labor market. This development provides the Fed with increased flexibility to maintain higher rates for a longer period.
Markets in Europe declined while most of the Asian stocks ended mixed as investors look ahead to key economic data and events in the following days.
Australia and Japan will release inflation figures on Tuesday and Thursday, while China will announce its trade balance and inflation numbers for December on Friday.
Bank of Korea will be holding the first central bank meeting of the year among major Asia economies on Thursday. Japan?s markets are closed for a public holiday, and will return to trade on Tuesday.
U.S.indices gained on Friday after a stronger-than-expected jobs report. The U.S. economy added many more jobs than anticipated in December, with nonfarm payrolls growing by 216,000. The unemployment rate held steady at 3.7%.
On Sunday, congressional leaders announced a deal establishing a $1.59 trillion in top-line spending, in order to avoid a potential government shutdown.
Stocks in Spotlight:
TVS Motor Company advanced 3% after the company signed a memorandum of understanding with Guidance, the Nodal Agency of Government of Tamil Nadu with the proposal to invest Rs 5,000 crore over five years in the state.
Jupiter Wagons rallied 2.12% after the firm received contract from an automobile manufacturer for the manufacturing and supply of 4 rakes of double decker automobile carrier wagons worth around Rs 100 crore.
DLF rose 0.78%. The company announced pre-formal launch sales of approximately Rs 7,200 crore for its latest luxury residential development, DLF Privana South in Gurugram.
Titan Company fell 0.12%. The Tata Group Company on Friday announced that it has registered 22% year on year (YoY) growth in revenue for the quarter ended 30 December 2023. Titan added a total of 90 stores during the quarter, taking the group's retail presence to 2,949 stores.
Tata Steel shed 1.20%. The steel major's India business reported 6.4% increase in crude steel production to 5.32 million tons in Q3 FY24 as compared with 5 million tons posted in Q3 FY23.
Marico slipped 4% after the FMCG major said that its India business reported low-single digit volume growth in Q3 FY24, with low single-digit growth in Parachute Coconut Oil. Marico has also reported a slight sequential improvement in its core portfolio.
Adani Wilmar fell 1.94% after The edible oil major on Friday announced that it has reported 6% year on year volume growth in Q3 FY24, driven by increasing penetration of packaged oil and food.
Godrej Consumer Products declined 3.69% after the FMCG company reported double-digit growth in volume terms in India for December quarter, with the operating environment remaining similar to the second quarter.
FSN E-Commerce Ventures (Nykaa) advanced 1.99% after the company announced that it has witnessed consistent growth across its three business verticals. NCL Industries said that its cement production stood at 749,703 MT in Q3 FY24, registering a growth of 5.17% as compared with 712,820 MT produced in Q3 FY23.
Bank of Baroda declined 4.69% after the Bank of Baroda reported 13.41% increase in domestic advances to Rs 8,62,162 crore as on 31 December 2023 from Rs 7,60,249 crore recorded on 31 December 2022.
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