Benchmarks dip for 3rd day, but broader indices offer hope

The domestic equity benchmarks closed slightly lower on Thursday, marking their third consecutive day of losses. Investor sentiment was negatively impacted by growing uncertainty surrounding U.S. tariff policies and their potential to fuel inflation.

Despite the overall market downturn, mid- and small-cap indices showed signs of recovery, offering a bright spot in otherwise subdued trading. The Nifty 50 index settled below the 22,950 level. Metals, PSU banks, and energy stocks saw increased demand, while banking and financial services stocks faced selling pressure. Trading activity was volatile due to the expiry of weekly index options on the NSE.

The S&P BSE Sensex, slipped 203.22 points or 0.27% to 75,735.96. The Nifty 50 index shed 19.75 points or 0.09% to 22,913.15.

HDFC Bank (down 2.35%), ITC (down 1.06%) and ICICI Bank (down 0.89%) were major drags.

The broader market outperformed the frontline indices. The S&P BSE Mid-Cap index advanced 1.18% and the S&P BSE Small-Cap index gained 1.32%.

The market breadth was strong. On the BSE, 2669 shares rose and 1273 shares fell. A total of 112 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, slumped 4.78% to 14.68.

Politics:

Rekha Gupta was sworn in as the new chief minister of Delhi today. She will be Delhi's fourth woman CM after Sushma Swaraj, Sheila Dikshit, and Atishi. Gupta's selection as CM came 10 days after the BJP's landslide win in the Delhi Assembly elections, where the party secured 48 out of 70 seats, ending AAP's decade-long rule. The BJP has yet to announce its ministerial lineup.

Numbers to Track:

The yield on India's 10-year benchmark federal paper jumped 1.99% to 6.815 compared with the previous close of 6.682.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 86.6400, compared with its close of 86.9800 during the previous trading session.

MCX Gold futures for 4 April 2025 settlement were added 0.63% to Rs 86,450.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.29% to 106.88.

The United States 10-year bond yield shed 0.29% to 4.522.

In the commodities market, Brent crude for April 2025 settlement gained 5 cents or 0.07% to $76.09 a barrel.

Global Markets:

Most European markets advanced on Thursday as investors monitor earnings reports from a raft of major European companies.

Asian stocks tumbled on Thursday as investors assessed U.S. President Donald Trump's proposed tariffs on autos, chips, and pharmaceutical imports, along with the possibility of the Federal Reserve keeping interest rates higher for longer.

Trump, who said the duties could be implemented as soon as April 2, did not specify whether they will be targeted at imports from certain countries or be broad-based.

The minutes from the Fed's January meeting showed policymakers remained hesitant about lowering interest rates amid persistent inflation and economic uncertainty. Officials also discussed the possibility of pausing or slowing the balance-sheet runoff'known as quantitative tightening (QT)'until the ongoing debt-ceiling issue is resolved.

The People's Bank of China held the 1-year loan prime rate unchanged at 3.1%, and the 5-year LPR at 3.6%. The one-year LPR influences corporate loans and most household loans in China, while the five-year LPR serves as a benchmark for mortgage rates.

The Hong Kong consumer price inflation increased to 2% in January 2025 as against 1.4% in December 2024 and 1.7% in January 2024. Orders for Taiwanese exports fell by 3% year-on-year to $48.4 billion in January 2025, slipping from a 20.8% growth in December 2024.

Despite cautious signals from the Fed, U.S. indices managed mild gains on Wednesday. The S&P 500 inched up 0.2% to a record high of 6,144.09 points, while the NASDAQ Composite added 0.1%, closing at 20,057.25 points. The Dow Jones Industrial Average also rose 0.2%, settling at 44,627.46 points.

Palantir Technologies tumbled more than 4% in after-hours trading, extending an 11% loss from Wednesday's session. Other defense stocks, including Lockheed Martin and RTX Corp, also saw mild aftermarket declines following reports that Defense Secretary Peter Hegseth had instructed Pentagon leaders to prepare for annual budget cuts of at least 8% over the next five years.

Fresh U.S. economic data released Wednesday showed a slowdown in housing starts for January, as both single-family and multifamily home construction pulled back. Housing starts slumped 9.8% month-over-month to an annualized 1.366 million, down from December's 10-month high of 1.515 million.

Stocks in Spotlight:

Mahindra & Mahindra added 3.01% after the firm has entered into strategic partnership with US-based Anduril Industries, a leader in autonomous systems, to co-develop cutting-edge security and surveillance technologies.

Larsen & Toubro shed 0.24%. The company announced that its minerals & metals (M&M) business vertical of L&T secured large order from Hindalco for setting up an 850 KTPA (kilo tonne per annum) greenfield alumina refinery plant in Odisha.

Radico Khaitan climbed 8.65% after the company announced that its Royal Ranthambore Whisky is now available in the Canteen Stores Department (CSD). This move is a key part of Radico Khaitan's strategy to expand its premium spirits portfolio.

Vesuvius India jumped 5.22% to Rs 3795 after the company announced its board will consider a stock split on 26 February 2025. The board will also review and approve audited financial results for the year ended 31 December 2024 (FY24), and consider a dividend.

Avantel surged 14.85% after the company announced that it has bagged a new order from NewSpace India for supply, installation and commissioning of devices for Xponders.

Thomas Cook (India) surged 11.74% after the company and its group company SOTC Travel, has signed a strategic 24-month partnership with Korea Tourism Organization (KTO) to create a special projects in the India market.

Garden Reach Shipbuilders & Engineers (GRSE) shed 0.38%. The company has signed a contract worth Rs 123.07 crore with the Ministry of External Affairs, Government of India, for the refit of the Mauritius Coast Guard ship, CGS Barracuda.

Bharat Forge rose 0.74%. The company announced that its 100% subsidiary, Kalyani Strategic Systems (KSSL), has signed a Letter of Intent (LOI) with AM General, USA for the supply of made-in-India advanced artillery cannons to the United States.

ITCONS E-Solutions hit an upper circuit of 5% after the firm secured a new work order from Wipro to provide manpower services on a contractual basis for the period of one year.

Intellect Design Arena added 1.10% after the company announced the signing of a multi-year deal with leading London Market Brokerage firm worth Rs 200 crore.

Krishna Institute of Medical Sciences (KIMS) rose 0.97%. The company announced the signing of an operations and management agreement (O&M) with Splendid Hospitals, Hyderabad, Telangana.

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