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Weekly Market Report
In the volatile Budget week, the Indian equity market posted the biggest weekly gains in two months, with benchmarks rising 2 percent each amid in-line Interim Budget & FOMC meet outcome, positive global cues, and Q3 earnings.
For the week, Nifty gained 501.2 points or 2.34 percent to finish at 21,853.80, while BSE Sensex added 1,384.96 or 2 percent to close at 72,085.63.
The BSE Small-cap index added 3.3 percent this week to hit a fresh high of 46,169.7. Also, the BSE Mid-cap Index rose 3 percent and touched a fresh high of 39,140.16. Further, the BSE Large-cap Index gained 2.4 percent to hit a new high of 8,516.13.
In terms of the market value, Reliance Industries added the most in terms of market value, followed by Tata Consultancy Services, State Bank of India, and Power Grid Corporation of India. On the other hand, Larsen & Toubro, ITC, and Bajaj Finance lost most of their market cap.
Among the sectoral indices, the Nifty PSU Bank index surged 11.5 percent, the Nifty Oil & gas index rose 9 percent, the Nifty Energy index gained 8 percent, and the Nifty Metal, Auto and Realty indices up 4 percent each.
Domestic institutional investors (DIIs) continued their support to the market as they bought equities worth Rs 10,102.62 crore during the week. On the other hand, Foreign institutional investors (FIIs) also shrunk their selling as they sold equities only worth of Rs 2,008.68 crore. In January, the FIIs sold equities worth Rs 35,977.87 crore and DIIs bought equities worth Rs 26,743.63 crore.
This week, the Indian rupee gained against the US dollar. The domestic unit added 19 paise to end at 82.92 in the week ended February 2
ECONOMY
RBI likely to hold rates until mid-year
The Reserve Bank of India will hold its key interest rate steady at 6.50% on Feb. 8, according to economists polled by Reuters who expected the central bank to keep rates unchanged until at least July.
After hiking its repo rate by a cumulative 250 basis points – much less than most of its major peers – the RBI has kept it untouched since February 2023 as inflation largely remained within the bank’s 2%-6% target range.
A few weeks ago, RBI chief Shaktikanta Das expressed confidence that the current monetary policy could bring inflation back to its 4% medium-term target. But with inflation close to the upper band of the target range and India holding onto its title of fastest-growing major economy, a rate cut is unlikely anytime soon.
Jobs outside formal economy not getting counted, says FM
Finance Minister Nirmala Sitharaman has called for a more informed discussion on India’s employment scenario, saying the focus is far too much on what is happening in the formal economy.
The finance minister said that if new companies were now being registered at a faster pace than before, it could not occur without the creation of new jobs.
As per the latest data from the government’s Periodic Labour Force Survey, the overall urban unemployment held steady at 6.6 percent in the second quarter of 2023-24, unchanged from April-June 2023. At 6.6 percent, the rate of unemployment in Indian cities is at its lowest ever since the survey was started in 2018-19.
Target 5.1% fiscal deficit for FY25 a big positive
The big positive surprise in this Budget is to target a 5.1 percent GFD/GDP for FY25. Other important fiscal metrics, such as primary deficit and revenue deficit are also seen to improve significantly in FY25 to 1.5 percent (2.3 percent in FY24) and 2.0 percent (2.8 percent in FY24) respectively. This has enabled the government to restrict its gross borrowing number to Rs 14.13 lakh crore for FY25, compared to Rs 15.43 lakh crore in FY24.
Global markets
US market: S&P 500 surges to record closing high on solid earnings
US stocks ended sharply higher on Friday and the S&P 500 registered an all-time closing high as strong earnings and a blowout January employment report boosted confidence in the economy. All three major U.S. stock indexes notched their fourth consecutive weekly gains.
The S&P 500 climbed 1.07% to end the session at 4,958.61 points. The Nasdaq gained 1.74% to 15,628.95 points, while the Dow Jones Industrial Average rose 0.35% to 38,654.42 points.
Asian shares rally on US tech bounce
Asian shares were buoyed by a late bounce in U.S. tech on Friday as results from Meta and Amazon beat expectations, while investors are bracing for U.S. jobs figures.
In Asia, Japan’s Nikkei added 0.5%, bringing the weekly gain to 1.2%. while However, weak China sentiment again weighed on the local markets. China’s blue chips fell 0.7%, while Hong Kong’s Hang Seng index pared earlier gains to be up just 0.3%.
Stocks in News
IndiGo Q3 results: InterGlobe Aviation Ltd, the parent company of India’s largest budget airline IndiGo, on February 2 posted a 111 percent jump in net profit in the December quarter, helped led by continued demand for air travel and a fuel surcharge introduced in October. Net profit came in at Rs 2,998.12 crore against Rs 1,422.6 crore in the year-ago, the air carrier told exchanges. Revenue surged 30 percent to Rs 19,452.15 crore.
SBI Q3 results: The company reported a net profit of Rs 9,163 crore for the October-December quarter of the financial year 2023-24, marking a 35 percent fall as compared to Rs 14,205 crore clocked in the year-ago period. The net profit missed an average of five brokerage estimates of Rs 13,525 crore.
Tata Motors Q3 results: The company reported a jump in its consolidated net profit at Rs 7,025 crore for the October-December quarter from Rs 2,957.71 crore a year ago, helped by robust demand for passenger and commercial vehicles in India, sustained growth in Jaguar Land Rover models, easing raw material costs, price hikes and a superior product mix. Revenue surged 24.9 percent on-year to Rs 110,577 crore as against Rs 88,489 crore in the same period last year, Tata Motors said in an exchange filing.
TVS shares: The company traded 2.4 percent higher in the afternoon on February 2 after the leading two-wheel manufacturer reported a 23 percent on-year increase in vehicle sales in January. The company sold 339,513 vehicles in the first month of 2024, up from 275,115 units in the same period last year, the company said in an exchange filing on February 1.
HDFC Bank & ICICI Bank: Two of India’s biggest lenders HDFC Bank and ICICI Bank have jointly floated a company called RMBS Development Company Limited to promote the residential mortgage-backed securities market. The two lenders have acquired a 7 percent stake each in a newly formed company, they informed in separate regulatory filings on February 2. Both HDFC Bank and ICICI Bank have invested Rs 35 crore each in RDCL, which is expected to be operational by the end of March.