Market Commentary - Mid-Session
The key equity indices experienced modest losses in early trade as global trade concerns dampened investor sentiment. This followed U.S. President Donald Trump's decision to impose reciprocal tariffs on several countries earlier this week. The Nifty traded below the 23,500 level. Barring the FMCG index, all the other sectoral indices on the NSE were traded in red.
At 09:30 IST, the barometer index, the S&P BSE Sensex, slipped 271.35 points or 0.35% to 77,588.84. The Nifty 50 index lost 96.10 points or 0.41% to 23,463.85.
The broader market underperformed the frontline indices. The S&P BSE Mid-Cap index fell 0.75%, and the S&P BSE Small-Cap index declined 0.96%.
The market breadth was weak. On the BSE, 1,237 shares rose and 1,867 shares fell. A total of 162 shares were unchanged.
Foreign portfolio investors (FPIs) sold shares worth Rs 470.39 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 454.20 crore in the Indian equity market on 7 February 2025, provisional data showed.
Politics
The Bharatiya Janata Party (BJP) won the Delhi legislative assembly elections with 48 out of 70 seats, marking its return to power in the capital after 27 years, while the Aam Aadmi Party (AAP) secured 22 seats. A party that wins more than the halfway mark of 35 seats can form the government.
AAP leaders Arvind Kejriwal and Manish Sisodia lost their seats to BJP candidates. The BJP's campaign focused on financial assistance for women and senior citizens, subsidies on essential goods, and infrastructure development. AAP's vote share declined by approximately 10% compared to the previous election. The Congress party failed to secure any seats for the third consecutive time but saw a slight increase in its vote share.
Stocks in Spotlight:
Life Insurance Corporation of India (LIC) rose 0.23%. The company reported 17.1% jump in standalone net profit to Rs 11,056.47 crore in Q3 FY25 as compared with Rs 9,444.42 crore in Q3 FY24. Net premium fell 8.7% to Rs 1,06,891.48 crore in Q3 FY25 as compared with Rs 1,17,016.93 crore in Q3 FY24.
Oil India slipped 3.94% after the company's standalone net profit declined 22.88% to Rs 1,221.80 crore on 1.58% slide in revenue from operations (excluding excise duty) to Rs 5,239.58 crore in Q3 FY25 over in Q3 FY24.
Shipping Corporation of India dropped 5.11% after the company reported 43.8% decline in consolidated net profit of Rs 75.52 crore in Q3 FY25 as against Rs 134.35 crore posted in Q3 FY24. Revenue from operations slipped 1.9% YoY to Rs 1,315.60 crore in the quarter ended 31 December 2024.
Numbers to Track:
The yield on India's 10-year benchmark federal paper was up 2.06% to 6.837 as compared with previous close 6.699.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 87.9175, compared with its close of 87.5000 during the previous trading session.
MCX Gold futures for the 5 April 2025 settlement rose 0.53% to Rs 85,340.
The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.32% to 108.39.
The United States 10-year bond yield shed 0.13% to 4.481.
In the commodities market, Brent crude for April 2025 settlement added 42 cents or 0.56% to $75.08 a barrel.
Global Markets:
US Dow Jones index futures were up 73 points, suggesting a positive opening for US equities. However, gains were tempered by anticipation of key US inflation data due this week.
Most Asian stocks traded higher on Monday. U.S. President Donald Trump threatened additional tariffs, including on steel and aluminum. This inflationary measure could reduce the likelihood of rate cuts in the US.
The individual indicated that 25% tariffs on all steel and aluminum imports into the US would be announced on Monday, with other reciprocal tariffs revealed on Tuesday or Wednesday.
These comments followed German Chancellor Olaf Scholz's statement that the European Union was prepared to respond within an hour if the US imposed tariffs on European goods, underscoring the potential for an escalating trade conflict.
China's retaliatory tariffs on certain US exports are scheduled to take effect on Monday, with no apparent progress in discussions between Beijing and Washington.
Wall Street experienced some recovery buying after significant declines on Friday, when Trump signaled intentions to impose tariffs on US imports to match levies from US trading partners on American goods. These plans were reiterated on Sunday.
Trump on Sunday said that 25% tariffs on all steel and aluminum imports to the US would be announced on Monday, shortly after his 10% tariffs on China took effect. These tariffs will supplement existing duties on steel and aluminum, implemented during his previous term and maintained by the current administration, albeit at a reduced level. The move is expected to primarily affect imports from Canada, Brazil, and Mexico, the largest steel exporters to the US. Canada is also the leading aluminum exporter to the US.
On Friday, the S&P 500 decreased by nearly 1%, and the NASDAQ Composite fell by 1.4%. The Dow Jones Industrial Average dropped by 1%. The Federal Reserve Chair is scheduled to testify before the House of Representatives on Tuesday and Wednesday, where the impact of tariffs on monetary policy is likely to be a prominent topic.
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