Market Pulse | 7th February, 2025

ECONOMIC HIGHLIGHTS

INDIA

• RBI delivers first rate cut in nearly 5 years: The Reserve Bank of India (RBI) on Friday cut its key repo rate by 25 bps to 6.25%, the first cut in nearly five years as it seeks to boost the sluggish economy and sees inflation easing towards its 4% target.
• Growth in India services sector slows to more than 2-year low in Jan, PMI shows: Growth in India's dominant services sector was the slowest in over two years in January amid cooling demand but remained historically strong and led to a substantial rate of hiring, a business survey showed on Wednesday.

GLOBAL HIGHLIGHTS

• Bank of England cuts rates and growth outlook, sees inflation 'bump': The Bank of England cut interest rates by a quarter-point to 4.5% from 4.75%. Some policymakers wanted a bigger move to offset a slowdown, but the BoE said it would be careful about further moves in the face of an expected inflation spike (BoE sees inflation peaking at 3.7% this year ) and global economic uncertainty.
• US weekly jobless claims edge up; worker productivity growth slows: The number of Americans filing new applications for unemployment benefits increased moderately last week, consistent with steadily easing labor market conditions, though opportunities for those out of work are becoming scarce amid tepid hiring.

MARKET HIGHLIGHTS

Benchmark indices eke out gains amid trade war concerns; rise for second week:

• SENSEX and NIFTY eked out gains this week to extend the winning run for a second week after the Union Budget 2025. On a weekly basis, SENSEX gained 354 points, or 0.45%, while NIFTY edged up 78 points, or 0.33%.
• HDFC Bank added the most of its market value, followed by Bharti Airtel, Bajaj Finance, Infosys. On the other hand, ITC, Hindustan Unilever, State Bank of India lost the most of their market-cap.
• Investors were not enthused by the first cut in policy rate since May 2020 as concerns over tariffs and weak Q3 results clouded sentiment.
• US President Donald Trump’s carrot-and-stick strategy over the tariff policy on imports from Canada and Mexico made investors jittery. China imposed retaliatory tariffs, which sent down fears of a possible trade war and kept market bulls in check. A correction in crude oil prices and a pullback in the US dollar gave some relief to investors but the foreign investors continued their selling spree.
• During the week, Foreign Institutional Investors (FIIs)sold equities worth Rs 8852.31 crore, while Domestic Institutional Investors (DII) bought equities worth Rs 6449.67 crore.
• Domestic gold prices hit a record high of 84,399 rupees ($968.62) per 10 grams on Wednesday. They have risen more than 10% so far in 2025 after rising more than 21% in 2024.
• The Indian Rupee tested a fresh record low of 87.59 during the week and closed the week at 87.4250, declining by nearly 1%, its worst weekly performance since December 2022.

• Swiggy's shares tank for 4th straight day, slip below IPO price: Following a decline for the fourth consecutive day, shares of online food aggregator Swiggy on Friday slipped below its initial public offering (IPO) issue price of Rs 390.According to market experts, the company’s shares are dropping due to investors’ reaction to the company's higher-than-expected losses in the third quarter (Q3 FY25) as an expansion of its quick commerce stores to counter rivals such as Blinkit and Zepto hit margins.
• Trent plummets as analysts fret over slowing growth: Shares of Trent plunged 9% on Thursday after analysts raised concerns about the Indian apparel chain's slowing revenue growth and ability to meet its annual store opening target. The company, home to brands such as Westside, Zudio and Utsa, has been one of India's fastest-growing clothing chains.
• MTNL’s 25% stock surge signal relief not revival: Shares of Mahanagar Telephone Nigam Ltd have soared 25% just in few days as investors cheer yet another government intervention to keep the struggling telecom operator afloat. The finance ministry plans to raise ?16,000 crore by selling assets of MTNL and BSNL and the proceeds will strengthen the telecom companies. MTNL defaulted on a significant payment last year and merged core operational assets with BSNL from January 2025.
• Divi’s Laboratories’ share price rises after Q3 results: Divi's Laboratories jumped 3.6% on Tuesday, taking its two-session gains to 8.3% since beating quarterly profit estimates. Its consolidated net profit (attributable to the Company's shareholders) for the fiscal third quarter ending December (Q3FY25) increased by 64.5% year over year to ?589 crore, as per results declared by the company on Monday.
• Kalyan Jewellers shares see best day in over 1-1/2 years after 26% wipeout in a month: Shares of Kalyan Jewellers were sharply higher by nearly 12% on February 4, clocking its best trading day in more than 1-1/2 years. Kalyan Jewellers reported a strong performance for Q3FY25, with consolidated net profit rising 21 percent year-on-year to Rs 218.82 crore, up from Rs 180.61 crore in the same quarter last year. Revenue surged 39.5 percent to Rs 7,286.88 crore, compared to Rs 5,223.08 crore in Q3FY24.
• Foreign sales in India's financials drive second-highest monthly outflows in January: Financials accounted for nearly a third of the foreign sales from the country's equity markets in January, highest outflows among sectors. Last month, foreign portfolio investors (FPI) offloaded domestic equities worth about $9 billion, the second-highest monthly sales on record.

SECTOR HIGHLIGHTS

• Budget boost and stable January sales have given much-needed respite to the auto companies whose stocks have rallied up to 9% over a week. Maruti Suzuki leads with a 9% return since the Budget, followed by Mahindra & Mahindra and TVS Motor Company, each gaining nearly 6%. Exide Industries, Eicher Motors, Tata Motors, MRF, Hero MotoCorp, and Bajaj Auto have returned between 5% and 1%.
• FMCG stocks extend losses post-budget, worst performing sectoral index this week: The shares of a few frontline fast-moving consumer goods (FMCG) companies extended losses for the third consecutive session on February 5 as the initial euphoria after Budget 2025-2026 seems to be on the wane. Worries over urban demand recovery and high valuations have triggered the drop in consumer stocks, three analysts said.
• Shares of metal companies surged after the first MPC under RBI's new Governor Sanjay Malhotra cut the central bank's repo rate. A cut in the repo rate is considered a positive for the growth of infrastructure and real estate. Metal stocks shine on such prospect, being a necessary raw material in such developments.The shares of Jindal Steel and Power were up nearly 4 %, while Tata Steel jumped over 3 %.
• Nifty Realty index climbed 1.62 % on Friday reacting to the rate cut with Macrotech Developers (Lodha) rising 3.61 % to an intraday high of Rs 1,242 on the NSE. Phoenix Mills and Oberoi Realty gained 3 % and 2.5 %, respectively. Shares of Godrej Properties, Sobha, and DLF also moved higher, climbing up to 2.16 %.

BUSINESS-INDUSTRY UPDATES

• Food delivery platform Zomato to rebrand as 'Eternal': ?Zomato said it will rename the company to "Eternal" and unveiled a new logo, a move that comes more than two years after it began using the new name internally. Eternal would comprise its four major businesses - food delivery vertical Zomato, quick-commerce unit Blinkit, live events business District and kitchen supplies unit Hyperpure.
• Indus Towers shares gain 3% after acquisition of Bharti Airtel, Bharti Hexaware's mobile sites: Indus Towers aims to acquire approximately 16,100 telecom towers as a part of the aforementioned deal. The acquisition of Bharti Airtel and sister entity, Bharti Hexacom is valued at Rs 3,308.7 crore, and will be conducted by way of slump sale.

QUARTERLY UPDATES

• ITC, Britannia beat profit estimates on price hikes, rural rebound: Indian consumer goods major ITC and biscuit maker Britannia Industries beat estimates for quarterly profit on Thursday, benefiting from price increases and a recovery in rural demand. Income support schemes by several states have encouraged people in rural India to spend more on food and other items, helping consumer goods companies to make up for a demand slowdown in urban areas.
• Tyre maker MRF profit plunges on higher rubber costs:? Tyre maker MRF posted a near 40% fall in third-quarter profit on Thursday, as higher rubber costs outweighed steady demand for tyre, sending its shares more than 3% lower.
• PVR Inox posts three-fold rise in quarterly profit on strong slate of films: India's largest multiplex chain PVR Inox reported a three-fold increase in third-quarter profit, as a strong line-up of new films attracted movie-goers during the festive period. The company, formed by the merger of PVR and Inox labels, posted a consolidated net profit of 359 million rupees ($4.10 million) in the quarter ended December 31, up from a year-ago profit of 128 million rupees.
• JK Lakshmi Cement's third-quarter profit halves on weak prices: JK Lakshmi Cement reported a 52% drop in third-quarter profit on Thursday, hurt by a drop in prices of the construction material. The company's standalone net profit after tax fell to 596.4 million rupees ($6.8 million) in the quarter from 1.24 billion rupees a year ago. Revenue from operations fell 13.4% to 13.73 billion rupees.Cement prices have been falling for most of last year, including a 11% on-year drop in the last quarter, which is also a seasonally weak one as the pace of construction activity slackens.