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Benchmarks erase some losses in morning deals
Jan-13-2025

Indian equity benchmarks erased some losses but continued to trade lower in morning deals amid weak global trends and unabated foreign fund outflows. Foreign institutional investors (FIIs) offloaded Rs 2,254.68 crore in the capital markets on a net basis on Friday, according to exchange data. Concerns over slowing earnings also weighed on market sentiment. Some anxiety also came as the Reserve Bank of India stated that India's forex reserves dropped by $5.693 billion to $634.585 billion in the week ended January 3. In the previous reporting week, the overall kitty had declined by $4.112 billion to $640.279 billion. However, losses remain capped as some support came with data released by the Ministry of Statistics and Programme Implementation (MoSPI) stating that India's industrial output, as measured by the Index of Industrial Production (IIP), experienced a 5.2% increase in November 2024. This marks a significant improvement from the previous month's growth rate of 3.5%. The three key sectors - Mining, Manufacturing, and Electricity - also saw growth rates of 1.9%, 5.8%, and 4.4% respectively during the same period. On the global front, Asian markets are trading lower amid uncertainty about the outlook for interest rate cuts by the Federal Reserve following upbeat non-farm payroll data.  

The BSE Sensex is currently trading at 77065.59, down by 313.32 points or 0.40% after trading in a range of 76535.24 and 77068.52. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 1.51%, while Small cap index was down by 1.45%.

The top losing sectoral indices on the BSE were Realty down by 2.66%, Consumer Discretionary down by 1.66%, Consumer Durables down by 1.54%, Industrials down by 1.36% and Oil & Gas down by 1.29%, while there were no gaining sectoral indices on the BSE. 

The top gainers on the Sensex were Indusind Bank up by 2.89%, Axis Bank up by 1.76%, TCS up by 0.74%, Titan Company up by 0.35% and Infosys up by 0.23%. On the flip side, Zomato down by 2.67%, Power Grid Corporation down by 2.13%, Mahindra & Mahindra down by 1.98%, Adani Ports &SEZ down by 1.58% and Tata Steel down by 1.49% were the top losers.

Meanwhile, CRISIL’s Market Intelligence and Analytics report has said that India will continue to outpace other major steel-consuming economies in calendar year 2025 with a demand growth of 8-9 per cent. This demand will be driven by a shift towards steel-intensive construction in the housing and infrastructure sectors along with better demand from engineering, packaging and other segments. The report, however, highlighted that the domestic supply will remain a point of concern, adding that the demand is estimated to have increased by 11 per cent in India. Competitive imports and a decline in exports also played a role in weaker production growth in 2024.

While finished steel imports increased by 24.5 per cent, exports declined by 6.4 per cent, leading to additional availability of 3.2 million tonnes of finished steel apart from domestic production. This additional material availability accounted for 2 per cent of the total finished steel demand. It stated that the finished steel imports from all key exporters to India have increased significantly in the past few years.

It said, for instance, China has traditionally been an exporter of value-added products and speciality steel such as galvanised and coated steel, alloy steel and stainless steel to India, with a minimal share of hot-rolled coils and strips (HRC) and cold-rolled coils and strips (CRC). However, between 2022 and 2024, while finished steel imports from China increased 2.4-fold, imports of HRC jumped 28-fold. Notably, HRC is used as feed material to produce various value-added downstream products, and these imports are often at a discount to domestic HRC prices, creating price pressure on domestic steel.

Similarly, the overall finished steel import from Japan increased 2.8-fold in 2024 from the base of 2022, while HRC imports increased 16.6-fold. Finished steel imports from Vietnam increased 8-fold, while HRC imports jumped 27-fold. Import growth from South Korea was relatively modest, bringing down its share in India’s finished steel import basket.  Moreover, it mentioned domestic steel prices, meanwhile, declined in 2024, impacted by additional material availability due to an increase in net imports. HRC prices declined 9 per cent, and CRC prices declined 7 per cent, thereby slowing the topline growth of domestic mills. Nevertheless, low volatility and declining coking coal prices have helped to lessen margin pressure to some extent.

The CNX Nifty is currently trading at 23319.35, down by 112.15 points or 0.48% after trading in a range of 23172.70 and 23323.45. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 2.99%, Axis Bank up by 1.77%, Shriram Finance up by 0.86%, TCS up by 0.79% and Britannia Industries up by 0.58%. On the flip side, Trent down by 3.30%, Apollo Hospital down by 2.04%, Power Grid Corporation down by 2.02%, Mahindra & Mahindra down by 2.00% and Wipro down by 1.88% were the top losers.

Asian markets are trading lower; Taiwan Weighted lost 485.69 points or 2.11% to 22,526.17, Hang Seng declined 256.61 points or 1.36% to 18,807.68, KOSPI dropped 23.69 points or 0.94% to 2,492.09, Straits Times fell 22.08 points or 0.58% to 3,779.48, Jakarta Composite plunged 31.11 points or 0.44% to 7,057.76 and Shanghai Composite weakened 14.15 points or 0.45% to 3,154.37.


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