Market Pulse | 10th January, 2025

ECONOMIC HIGHLIGHTS

INDIA

· India rupee hits lifetime low, falls for 10th straight week: The Indian rupee slipped to its all-time low on Friday as the dollar stood firm ahead of closely watched U.S. labour market data, keeping regional currencies on the defensive. The rupee weakened to 85.97 against the U.S. dollar, inching past its previous record low of 85.9325 hit on Thursday. The currency ended at 85.9650, down 0.2% on the week and logged its tenth consecutive weekly loss. The local unit has faced persistent headwinds over recent weeks on the back of a surging dollar and weak capital flows. However, routine interventions by the Reserve Bank of India have helped limit losses. State-run banks were spotted offering dollars on Friday as well, most likely on behalf of the RBI, three traders told Reuters. "We think the balance of risks is tilted to the upside for the dollar today, as robust jobs figures could prompt markets to price out a March cut and potentially push the first fully-priced move beyond June," ING Bank said in a note. Expectations surrounding the incoming U.S. President's policies and slower rate cuts by the Fed have boosted the dollar and U.S. bond yields over recent weeks. Meanwhile, foreign investors have pulled out over $3 billion from Indian stocks and bonds so far in January.

?· India's industrial output at 6-month high of 5.2% y/y in November: India's industrial output growth hit a six-month high of 5.2% year-on-year in November helped by a strong rise in output of consumer durables and capital goods, government data showed on Friday. Economists polled by Reuters had expected a growth of 4.1%. Output in the manufacturing sector, which accounts for about 17% of Indias gross domestic product, advanced 5.8% in November, while electricity generation grew 4.4% and mining activity rose 1.9%, the data showed. We need to see if this (IIP growth) can be sustained in the coming months as this will help in boosting the GDP growth number for the year where manufacturing sector growth has been subdued at 5.3%, said Madan Sabnavis, an economist at Bank of Baroda. India's growth is projected to slow to a four-year low of 6.4% in the financial year ending March 31, according to government estimates released earlier this week.

GLOBAL HIGHLIGHTS

·?Gold rebounds on Trump policy uncertainty despite robust US jobs data

·?Gold prices rebounded on Friday as uncertainty surrounding the incoming Trump administration's policies lifted safe-haven appeal, even as a stronger-than-expected U.S. employment data reinforced expectations the Federal Reserve might not cut interest rates as aggressively this year. Bullion prices are now trading near their highest levels since Dec. 13, poised for a weekly gain of more than 1%.

·?U.S. job growth unexpectedly accelerated in December while the unemployment rate fell to 4.1% as the labor market ended the year on a solid footing, reinforcing views that the Federal Reserve would keep interest rates unchanged this month.

·?The upbeat report also supported the U.S. central bank's cautious stance toward further monetary policy easing this year amid mounting fears that pledges by President-elect Donald Trump to impose or massively raise tariffs on imports and deport millions of undocumented immigrants could stoke inflation.

· The dollar rallied while U.S. stock futures fell sharply after the jobs data. Markets show traders now expect the Fed to cut interest rates by just 30 basis points over the course of this year, compared with cuts worth about 45 basis points before the data.

·?China services activity hits 7-month high but US trade fears dent optimism, Caixin PMI shows: China's services activity expanded at the fastest pace in seven months in December, driven by a surge in domestic demand, but orders from abroad declined, reflecting growing trade risks to the economy, a private sector survey showed on Monday. The Caixin/S&P Global services purchasing managers' index (PMI) rose to 52.2 in December from 51.5 the previous month. The growth pace was the fastest since May 2024, surpassing the 50-mark that separates expansion from contraction on a monthly basis.

· Sterling falls for fourth straight day to hit 14-month low after US jobs data:British currency remained under pressure on Friday, January 10, from high global borrowing costs. Sterling fell for the fourth day in a row and better-than-expected US jobs data intensified the move. Meanwhile, gilt yields rose for a fifth consecutive day. After recording a moderate decline earlier in the day, the pound continued its slide. Gilt yields jumped after US government data showed employers added more jobs than expected in December. The pound was down 0.53% after briefly touching $1.2194, its lowest since November 2023. 10-year gilt yields were up three basis points (bps) to 4.84%, down from the session high of 4.889%. British markets have been among the most impacted, with sterling losing 1.5% on the week, gilts underperforming peers, and domestically focused stocks also struggling.

MARKET HIGHLIGHTS

·?Indian equities ended the week with significant losses, as both major indexes fell approximately 2.4%, snapping a two-week winning streak. The market faced a series of headwinds, including concerns over economic growth, subdued earnings, and global health scares.

·?The week began with panic selling triggered by rising cases of the HMPV influenza strain in China, which spooked investors. On Monday, both benchmarks suffered their worst single-day performance in three months, with the SENSEX plummeting 1,258 points and the NIFTY50 shedding 388 points (1.6%) to close at the 23,600 level. The crash, fueled by broad-based sectoral declines and lackluster quarterly updates from banks, wiped out approximately ?11 lakh crore of investors' wealth.

· Foreign portfolio investors (FPIs) continued their selling spree, recording net outflows of $2.2 billion in six of the seven trading sessions in January. Meanwhile, domestic institutional investors (DIIs) provided some support, net purchasing shares worth ?24,216 crore to offset FPIs' net sales of ?21,353 crore.

·?The earnings season emerged as a crucial test for market sentiment, particularly for small- and mid-cap stocks, which rely on strong earnings to justify their valuations. Reflecting this pressure, the Nifty Smallcap 100 index plunged 7.3%, while the Nifty Midcap 100 index dropped 5.8% over the week.

·?Compounding the challenges, India’s GDP growth forecast for FY25 was revised to 6.4%, the lowest in four years and a steep decline from the 8.2% growth in FY24. This marks the slowest growth rate since the pandemic, signaling moderation across key sectors. The bleak economic outlook has heightened fears about the sustainability of corporate earnings and market valuations, further dampening investor confidence.

·?Adani Wilmar Shares Tank 9% As Adani Group Plans To Sell 20% Stake Via OFS: Adani Wilmar shares continued their downward trend for the third consecutive day, dropping 9.5% on Friday following the launch of a two-day offer-for-sale (OFS) by promoter Adani Commodities targeting non-retail investors at a 15% discount to Thursday's closing price. In December 2024, Adani Enterprises, the flagship company of the Adani Group, announced its decision to exit its joint venture stake in Adani Wilmar. As part of this move, Adani Enterprises intends to sell a 13% stake to comply with minimum public shareholding requirements, while its partner, Wilmar International, will acquire the remaining 31% stake.

?·?Kalyan Jewellers shares decline for sixth consecutive day: The stock has been declining after investors engaged in profit booking, following the company's Q3 update that highlighted the likeliness of its net revenue to grow by 39 percent with India business surge standing at 41 percent on festive and wedding demand. The quarter also witnessed growth in same-store-sales, close to 24 percent.

·?At 52-week low- Tata Elxsi shares tank 8% as Q3 results miss Street estimates, profit declines: Shares of Tata Elxsi crashed 8 percent in morning deals on Friday, January 10 after the company missed Street estimates in the third quarter (Q3FY25) results. The stock fell as much as 8 percent to its 52-week low of ?5,924. The IT stock is now almost 35 percent away from its 52-week high of ?9,082.90, recorded in August 2024. Tata Elxsi announced a 3.5 per cent fall in net profit to ?199 crore in the October to December quarter results of the financial year 2024-25, compared to ?206.43 crore in the same quarter the previous year, according to the company's exchange filing.

·?IRCTC Shares Surge 5% After Macquarie Coverage Despite Recent Setbacks: Shares of Indian Railway Catering and Tourism Corporation Ltd (IRCTC) rose nearly 5% to an intra-day high of ?800.75 on January 10, following positive coverage by global brokerage Macquarie. Highlighting IRCTC’s monopoly in Indian Railways’ e-ticketing and catering services with an 80% market share, Macquarie’s coverage sparked investor interest. However, the stock has faced challenges, including a 1.8% dip earlier this week to a 52-week low of ?761.8 and a 16.5% decline over the past year. IRCTC also made headlines due to recurring app and website outages in December, coinciding with peak tatkal booking times.

·?Biocon shares zoom 8% after Jefferies upgrade to 'hold', price target lifted by 43%: International brokerage Jefferies has upgraded its rating on drugmaker Biocon to 'hold' citing positive newsflow around the regulatory approval of its Bengaluru manufacturing unit. Building on the optimism, Jefferies also lifted its price target for the stock by a whopping 43 percent to Rs 400, translating into an upside potential of around 12 percent from Monday's closing price.The positive rating action on the stock lifted shares of Biocon nearly 8 percent higher on January 7. At 11.01 am, shares of Biocon were trading at Rs 382.95 on the NSE.

·Shriram Finance share declines 6% as it trades ex-stock split: Shriram Finance share price declined 6% on the stock exchanges on Friday, January 10, 2025. The fall in Shriram Finance shares came as the stock began trading ex-date for stock split today. Shriram Finance share hit an intraday low of Rs 528.7 per share on the BSE and Rs 529 on the NSE. Shriram Finance share split came into effect today as the company had fixed January 10, 2025, as the record date for the stock split. “The company has fixed Friday, January 10, 2025 as the ‘Record Date’ for determining the entitlement of equity shareholders for the purpose of sub-division/split of face value of each equity share of face value of Rs 10, fully paid-up, into 5 equity shares of face value of Rs 2,” the company had said in a stock exchange filing on December 23, 2024.

?· India's FX reserves slump to 10-month low as rupee pressure mounts: India's foreign exchange reserves fell for the fifth consecutive week to a 10-month low of $634.59 billion as of Jan. 3, data from the Reserve Bank of India (RBI) showed on Friday. The reserves declined by $5.7 billion in the reported week, after falling by a cumulative $17.8 billion in the prior three weeks. Reserves have fallen by about $70 billion from their all-time high of $704.89 billion in late September. The rupee has faced persistent headwinds over recent weeks, as the dollar has strengthened and capital flows have slowed following a slowdown in India's economic growth. The central bank has routinely intervened in the foreign exchange market via state-run banks to limit the rupees losses. The magnitude of the RBI's forex intervention since October has been substantial and is resulting in adverse effects, such as tighter banking system liquidity and higher short-term rates at a time of weakening growth, Nomura analysts said.

?·Surya Roshni shares pop 5% on securing deal from BPCL for CGD project: Lighting company Surya Roshni shares rallied as much as 5.01% to hit an intraday high of Rs 269 apiece on Friday, January 10, 2025. The uptick in Surya Roshni share price came after the company announced that it has secured an order of Rs 81.47 crore from Bharat Petroleum Corporation Limited (BPCL). In an exchange filing, Surya Roshni said, “it is hereby informed that the Company has obtained an order amounted to Rs 81.47 crore (with GST) from BPCL for CGD Project on Pan India basis.” Under the terms of the order, Surya Roshni will be responsible for the supply of API SL PSL2 LPE coated line pipe of size 4 to 16 in diameter. The company will be required to complete the project in 16 weeks (4 months), Surya Roshni said in a statement.

· Paytm share price drops 14% this week: Paytm shares were trading lower in stock markets today, falling up to 5.6% on the BSE. Paytm share price hit an intraday low of Rs 843.5 per share on the stock exchange, and Rs 842.8 per share on the NSE. Including today’s decline, Paytm share price has tumbled 14.13% on the BSE during this week. From its 52-week high level of Rs 1,063, which it hit on December 17, 2024, the share price has crashed 20.6 per cent. This means that the stock has entered the ‘bear’ zone – a situation when security declines 20% or more from its recent peak. As per the latest NPCI data, Paytm struggled with its UPI transactions in December, 2024, as its transaction volume stood at 1.15 billion last month, which was worth Rs 1.25 trillion.

?· IndusInd Bank down 4% as Goldman Sachs downgrades to 'Neutral', cuts target: Private banking company IndusInd Bank shares fell as much as 4.29% to hit an intraday low of Rs 938.80, nearing its 52-week low of Rs 927.05. Notably, IndusInd Bank share was also the top loser on BSE. The downfall in the IndusInd Bank share price came after reports indicated that the New York-based brokerage Goldman Sachs downgraded the stock to ‘Neutral’. The brokerage also slashed the target price to Rs 1,090. However, the reduced target price reflects an upside potential of 11.12% from the previous close of Rs 980.90 on January 9, 2025. The bank is also awaiting the Reserve Bank of India’s (RBI) approval for the reappointment of its CEO, with the decision expected before March 23, 2025, when the current term expires.

SECTOR HIGHLIGHTS

·?Twelve of the 13 major sectors logged weekly losses barring IT (Nifty IT) which rose 3.4% on Friday, helping close the week with a 2% gain. Tata Consultancy Services jumped 5.6% on Friday, adding 4% for the week - the most among Nifty 50 members - after it said it was betting on Donald Trump's regime to revive client confidence and discretionary spending in North America, a key market for IT companies.

·?Although registering negative returns for the week, Nifty FMCG was the second-best sectoral performer, attracting robust investor interest. This comes as brokerage firm CLSA made consumer staples its biggest anti-consensus call for 2025. After avoiding the sector in its India portfolio for four years, CLSA has now turned "overweight" on consumer staples, making it the largest allocation in its India portfolio.

·?Public Sector Bank stocks (Nifty PSU Bank) were the worst hit this week, weighed down by lacklustre Q3 business updates that fell short of optimistic expectations. Union Bank emerged as the top loser, as its December quarter business updates were the poorest among state-owned lenders who released the updates last week.

·?Nifty Realty was the biggest sectoral loser with losses of nearly 3 percent on Thursday as majors like DLF, Godrej Properties, Lodha and Oberoi Realty dragged the index.

·?The oil and gas index advanced 1.6% on Tuesday as index heavyweight Oil and Natural Gas Corp jumped 3.6% and was the top gainer on the Nifty 50. CLSA upgraded the upstream oil company's stock to "high conviction outperform" from "outperform" and raised, citing a potential uptick in earnings and attractive valuations. Reliance Industries, the second-heaviest stock on the benchmarks, gained 1.9% after Jefferies reiterated its "buy" rating, saying the stock's valuation was the lowest since the onset of COVID-19.

·?Local metal firms lost 3% on Monday, tracking global peers as a firmer dollar weighed. A stronger greenback makes metals more expensive for holders of other currencies.

BUSINESS-INDUSTRY UPDATES

· Vedanta Resources gets $300 million loan commitment for debt refinancing: Indian miner Vedanta parent on Friday said it has secured commitments from Barclays, First Abu Dhabi Bank, and Mashreq totalling $300 million in loan tenors of 3 years and 3 months. The proceeds will be used for refinancing some outstanding 2024 and 2026 bonds and for meeting other debt servicing obligations, Vedanta Resources said in an exchange filing. The company is looking to upsize the deal and is in advance discussions with other banks for additional loans of $200 million, it said. In September 2024, Vedanta Resources raised $900 million in its first dollar bond issue in more than two years and later raised $800 million through another dollar bond issue in November to refinance some outstanding debt. The loan arrangement enhances the groups liquidity position, Vedanta Resources said.

?· Waaree Energies inks pact to acquire Enel Green Power India for Rs 792 cr: Waaree Energies on Friday said it has inked a share purchase agreement to acquire entire equity stake in Enel Green Power India Pvt (EGPIPL) for a consideration of up to Rs 792 crore. The seller is one of Europes largest renewable energy companies, and the EGPIPL is its Indian business, a regulatory filing stated. Waaree Energies Ltd has entered into a Share Purchase Agreement (SPA) with E nel Green Power Development S.r.l (Seller) on January 10 to acquire 100% of the share capital of EGPIPL for a total amount of upto Rs 792 crore, subject to customary closing adjustments, according to the filing. Further, pursuant to the acquisition of shares, EGPIPL will become a subsidiary of Waaree Energies. The acquisition will diversify revenue streams, enhance execution capabilities for wind projects, and facilitate expedited growth of Waarees its Independent Power Producer (IPP) business, it stated. The completion of the deal is expected within a period of 3 months, subject to fulfilment of the conditions precedent as set out in the definitive agreements. The turnover from operations for FY24 stood at Rs 112 crore, compared to Rs 266 crore in FY23 and Rs 129 crore in FY22.

QUARTERLY UPDATES

· JSW Steel share price rebounds from intraday low after Q3FY25 update: JSW Steel share price rebounded from intraday low after company released Q3FY25 update. Production of the Consolidated entity increased 4% sequentially and was up 2% on the year on year basis.nbsp;The JSW Steel share price thereafter while dipped to intraday lows ofnbsp;nbsp;?880.45 as the benchmark indices also saw selling pressure intensify. However business updates announced by the company meant that JSW steel share price bounced tonbsp;?894.95 levels, marking gains of 1.6% from the intraday lows. Indian operation of JSW Steel saw Crude Steel production at 6.82 million tonnes, which was higher by 3% sequentially as well as on year on year basis too. The Capacity utilisation at Indian Operations excluding trial run stood at 91% for Q3 FY25. Production and capacity utilisation for the quarter could have been more but were affected due to temporary maintenance activity at one of the Blast furnaces at Dolvi in the month of October, which resumed normal operations in the 1st week of November, said the company.

?· TCS shares jump nearly 5 pc post-December quarter earnings: Shares of Tata Consultancy Services (TCS) jumped nearly 5% on Friday morning after the IT services company reported an 11.95 per cent jump in December quarter net profit to ?12,380 crore. The bellwether stock surged 4.73 per cent to ?4,227.70 on the BSE. At the NSE, it climbed 4.60% to ?4,225. The company's market valuation soared ?69,829.1 crore to ?15,30,324.39 crore during the morning trade. TCS emerged as the biggest gainer among the Sensex and Nifty stocks in an otherwise weak equity market trend. Results of TCS indicate that the IT sector will continue to remain resilient, V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said. The Tata Group company had reported a net profit of ?11,058 crore in the year-ago period and ?11,909 crore in the preceding September quarter. The company's revenue grew 5.6 per cent to ?63,973 crore against ?60,583 crore in the year-ago period. However, it was down from ?64,259 crore in the September quarter.

?· IREDA share price falls over 3% after Q3 results.: IREDA share price declined over 3% on Friday after the state-run Non-Banking Financial Company (NBFC) reported its earnings for the third quarter of FY25. IREDA stock price fell as much as 3.4% to ?208.50 apiece on the BSE. The ‘Navratna’ PSU company Indian Renewable Energy Development Agency reported a net profit of ?425.38 crore in Q3FY25, registering a growth of 27% from ?335.5 crore in the same period last fiscal year. The company’s total revenue from operations during the quarter ended December 2024 increased by 35.6% to ?1,698.45 crore from 1,208.10 crore, year-on-year (YoY).

?· Phoenix Mills shares rise 3% on posting Q3 biz update: Phoenix Mills shares gained 2.9% in Fridays trade on BSE, logging an intraday high of Rs 1,684.6 per share. The buying sparked after the company released its Q3 business update. In its Q3 update, Phoenix Mills said its consumption (retailer sales) in Q3FY25 stood at Rs 3,998 crore, up 21% over Q3FY24. On a like-to-like basis, which excludes Phoenix Mall of the Millennium and Phoenix Mall of Asia, consumption grew by 10% year-on-year (Y-o-Y). It's consumption for the quarter was driven by a strong festive season, led by PMC Mumbai, PMC Pune, Phoenix Palassio, and the continued ramp-up at Phoenix Mall of the Millennium and Phoenix Mall of Asia (launched in September and October 2023 respectively). The expansion at Phoenix Palladium, Mumbai was recently completed, adding approximately 250,000 square feet of gross leasable area to this asset.

?· GTPL Hathway shares plunged 10% after Q3FY25 results: Investors dumped the shares of GTPL Hathway in loads on Friday after the company reported a sluggish third quarter earnings for the financial year 2024-25 (Q3FY25). GTPL Hathway share price plunged 9.85% at Rs 132.65 per share on the BSE in intraday trade. GTPL Hathway, a digital cable TV and broadband service provider, reported a 57.2% year-on-year (Y-o-Y) decline in net profit for the third quarter ending December 31, 2024. The company posted a net profit of Rs 10.1 crore, down from Rs 23.6 crore in the same period last year, according to a regulatory filing. However, the company’s revenue from operations rose by 4.3%, reaching Rs 887.2 crore compared to Rs 850.8 crore in the corresponding quarter of the previous fiscal year.nbsp;At the operating level, Ebitda fell 12.6% to Rs 105.3 crore from Rs 120.5 crore in the previous year, while the Ebitda margin decreased to 11.9% from 14.2%.

?· Indian power company CESC's Q3 profit falls amid higher tax expenses: India's CESC a power generation and distribution company, reported a fall in third-quarter profit on Friday, due to higher tax expenses and lower regulatory income. The companys consolidated profit fell 5.7% year-on-year to 2.65 billion rupees ($30.8 million) for the three months ended Dec. 31. Total tax expenses rose 27% to 800 million rupees. Regulatory income, which includes adjustments related to fuel cost, purchase of power and other fixed costs, fell to 3 billion rupees from 5.6 billion rupees a year ago.