 "Markets Today: TCS Q3; FIIs; Quadrant Future IPO allotment; US, UK bonds")
Stock Markets Today, January 10, 2025: As the earnings season kicked off with TCS reporting its Q3 numbers, investors now brace for a wave of financial disclosures expected to shape market sentiment. All eyes will be on the upcoming Q3 results, anticipated to provide key cues for the market's direction.
On the global front, weak cues added to the uncertainty, setting the stage for a potentially volatile trading session on Friday. At 6:31 AM, GIFT Nifty futures signalled a weak opening for bourses, trading 73 points lower at 23,575.
Thursday’s session had already painted a grim picture, with the Sensex plunging 528.28 points (0.68 per cent) to close at 77,620.21. The Nifty50 shed 162.45 points (0.69 per cent) to settle at 23,526.50.
Domestic cues
TCS faced a challenging macroeconomic environment in Q3FY25, with subdued discretionary spending from clients in key markets and seasonal weaknesses due to furloughs. Despite these headwinds, TCS reported a net profit of Rs 12,380 crore, reflecting an 11.9 per cent Y-o-Y increase from Rs 11,058 crore.
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Excess earnings of unlisted companies over and above their interest costs are at a record level. The interest-coverage ratio of 2.94 is the highest going back to 1990-91, according to the Centre for Monitoring Indian Economy (CMIE).
Equity mutual funds closed 2024 on a high note, with near-record inflows of Rs 41,156 crore in December, pushing the annual total to Rs 3.9 trillion, a 144 per cent jump from 2023.
The Securities and Exchange Board of India (Sebi) has postponed the implementation of two measures aimed at curbing excessive activity in index derivatives. The upfront collection of option premiums and the removal of calendar spread treatment on expiry days will now take effect on February 10, instead of February 1, according to a notice from NSE.
Other market triggers
Q3 results
RIL is expected to see its core business weigh on its earnings in Q3FY25. Analysts predict that the company’s Ebitda may remain flat or witness a slight decline compared to the same period last year. READ MORE
Other companies announcing their results include Brightcom Group, Just Dial, and CESC among others.
FII, DII activity
FIIs continued their selling spree, offloading shares worth Rs 7,170.87 crore on January 9. DIIs countered with purchases of equities worth 7,639.63 crore.
IPO market
Quadrant Future Tek IPO (Mainline), Capital Infra Trust IPO (Mainline), Avax Apparels IPO (SME), Delta Autocorp IPO (SME) and BR Goyal IPO (SME) will see their allotment.
Meanwhile, Barflex Polyfilms IPO (SME) and Sat Kartar IPO (SME) will open for subscription.
Global cues
Asia-Pacific markets mostly saw declines on Friday as investors digested data on Japan's November pay and household spending. Japan saw a 0.4 per cent year-on-year drop in real household spending for November, a smaller decline than the 0.6 per cent anticipated by a Reuters poll and an improvement from the 1.3 per cent contraction in October.
Thus, Nikkei was down 0.99 per cent, while the broader Topix index fell 0.6 per cent. Kospi slipped 0.1 per cent and the ASX 200 dropped 0.5 per cent.
US markets were closed on Thursday for the funeral of former President Jimmy Carter.
The US Treasury yields eased on Thursday after reaching an eight-month high, while the dollar strengthened against major currencies as investors reassessed the Fed’s interest rate policy for 2025 amidst signs of resilience in the US economy. The yield on the benchmark 10-year US Treasury note dipped 0.45 basis points to 4.689 per cent, after peaking at 4.73 per cent on Wednesday, its highest level since April 2024.
Meanwhile, the pound was on track for its steepest three-day decline in nearly two years. A recent selloff in global bonds, coupled with concerns over the state of the British economy, has placed major pressure on the pound and UK gilts. This has driven gilt yields to their highest levels in 16 and a half years.
Apart from that, attention turned to Friday’s labour data, with expectations of a 155,000 increase in December nonfarm payrolls, a decrease from the 227,000 added in November. The unemployment rate was projected to remain steady at 4.2 per cent. Commodity check
Oil prices climbed over 1 per cent on Thursday, supported by heightened winter fuel demand amid cold weather in parts of the US and Europe. Brent crude futures rose 1.37 per cent to $77.20 per barrel, while US WTI crude gained 0.89 per cent to $73.97 per barrel.
Gold prices edged lower on Thursday due to profit-taking after hitting a near four-week high in the previous session. Investors shifted their focus to the upcoming US jobs report for insights into the Fed’s monetary policy trajectory. Spot gold dipped 0.1 per cent to $2,659.62 per ounce, while US gold futures rose 0.2 per cent to $2,678.30.
Here's how analysts are assessing today's (January 10) trading session:
Vatsal Bhuva, technical analyst at LKP Securities
For the short-term, 23,500 acts as a key support, while resistance is placed at 23,800, capping any upside. Traders should monitor these levels closely, as they will dictate the index's immediate directional trend.
Shrikant Chouhan, head of equity research at Kotak Securities
For traders now, 23,650/78,000 will be the key level to watch; below this level, the market could continue its weak formation till 23,400-23,375/77,300-77.200. Conversely, if it rises above 23650/78000, it could bounce back to 23,750-23,800/78,300-78,500.